Thoughts on Budget.
In the Union Budget which was presented by the Finance Minister Pranab Mukherji the only measure that should be whole-heartedly welcomed by all citizens is the Goods & Services Tax (GST) which will reduce multiple taxes on the manufacturers, traders and citizens. However, the Central Government should adequately compensate all state governments who have to give up some their taxing powers. This is all for the good of the country as GST will remove barriers for transport of goods, reduce harassment and simplify collection of taxes. This is just like the single market which has been ushered in by the European Community. This has increased the GDP of EU countries.
Another measure which has to be partially welcomed is more investment is in social sectors especially what is called Bharat Nirman ( rural roads, electrification, housing etc.) as all these years villages have been neglected.. This has been done apparently in the belief that earlier investment in these have helped the party to come back to power. What the government has achieved in this sphere is nothing much to write home about. Till the end of 2008, all that was achieved was : rural road-network (34%), rural electricity to BPL families (13.8%), rural irrigation (50%), rural water supply (about 70%). Then are leakages which have to be taken into account. Nothing much has changed after the Former Prime Minister Rajiv Gandhi observed that only 15 paise out a rupee reached the beneficiary some 25 years ago.
President Roosevelt built oversight into the New Deal programme to ensure accountability, said Paul Krugman, Noble Prize winning economist, in an article in New York Times, some months ago. There seems to be no such auditing incorporated in the Bharat Nirman Programme. Until such measure is taken, this will only receive only one cheer.
All other announcements have nothing much to comment.
Mahatma Gandhi had given a test to politicians to judge their actions – whether that action makes the poorest of the poor to take charge of his destiny. That is, whether it will improve his life in any significant way. If we apply this test , the budget does not get even pass marks.
We still have at least 25 percent of our population below the poverty line. Farmers continue to commit suicides. The scheduled tribes children still suffer from mal-nutrition. There are no primary schools and no health-care facilities in many villages. Water is a scarce commodity in many villages..
Former Prime Minister P.V.Narasimha Rao through his Finance Minister Dr.Man Mohan Singh brought about a structural change in the Indian economy in 1991 by unleashing the potentials of Indian people. The private sector was given a greater role by abolishing permit-license raj. India's growth rate increased and many people were able to cross the poverty line. Toady India requires similar big steps to remove poverty from India.
1. Privatization of public sector enterprises : Take the example of Air India. It is over-manned, still runs old aircraft and has taken old planes on lease, makes large losses but the government still does want to privatize it. Why should a government run airlines and hotels when it has not been able to give drinking water, primary education and primary health care to our neglected villages ? Why government should continue to be the owner of so many manufacturing industry ? Most of the public sector enterprises make losses except those which are in oil industry ( Indian Oil, ONGC etc) or have monopoly. With the crude oil prices going up recently even the oil companies are in losses.
2. Non-conventional energy : Why there is no effort to harness non-conventional energy like solar energy and wind energy ? With almost 300 days of sun-shine, India should have been a pioneer in solar energy. " A hundred years ago, world's fuel was primarily coal. Today, it is oil. In the future, it will be renewal energy. By 2050, perhaps 50 percent of our energy will be non-carbon-based", says Fiona Paulus, head of energy at Royal Bank of Scotland ( The Financial Times, July 8). These energy sources will be ever-lasting and can ensure energy security.
2. Agriculture : Almost 65 percent of Indians depend on agriculture and its contribution has come down to about 25 percent of GDP. Agriculture is still dependent on monsoon in the large parts of the country. India has a large cultivable land and it could be an agricultural power if proper facilities are provided to the farmers – credit ( many still depend on money lenders), seeds, marketing etc. The extension work done during the Green Revolution has not spread all over the country. Drip irrigation, vegetable and fruits cultivation, contract cultivation has potential to increase agricultural production and create more wealth to the farmers.
3. Water resources : We have not harnessed our water resources properly. We have floods in some areas and drought in some other areas. We can collect flood waters and mansoon waters in dams and ponds. Even kings in ancient times had many step-wells to preserve water for use during the summer months. In this age of technology, impounding water should not be a problem at all. River-linking is a project which can give employment to large number of people and provide water to all dry-land. .
All the above require a bold initiatives. Dr.Man Mohan Singh and Pranab Mukherji do not have the boldness that P.V.Narasimha Rao and Dr.Man Mohan Singh had.
July 12,2009.
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