Friday, March 16, 2012
INDIAN BUDGET 2012-13: A DAMP SQUIB As USUAL
A lot was expected out of Indian budget 2012-13, but sadly enough it is turned out to be a damp squib and is devoid of any far sight on the part of collective wisdom of Indian rulers to give a concrete shape to the dreams and aspirations of teeming poor millions. It is plain and simple exercise in big talk, all politically motivated with an eye on votes and votes alone without any real concern of improving the quality of life of Indian citizens.
The estimated fiscal deficit of 5.1% of the GDP is going to be the single most irritating factor to the Indian economy and is likely to be exceeded during the run of the financial year with centre and all states vying with each other to fritter away tax payers money in the form of doles, freebies, and subsidies and the associated corruption in all these activities.The resulting inflation because of fiscal deficit and increases in petrol and diesel prices in the light of high international prices of oil will dictate Reserve Bank decisions on softening of interest rates, thus affecting growth finally resulting in lower tax collections.
The nation would have appreciated some out of the box thinking on the part of Finance Minister particularly in application of food security and food subsidy. No nation can ever afford to satisfy hungry mouths and empty stomachs as well as unemployed people with doles and freebies. The country must extract accountable work out of this huge manpower and pay them wages for their contribution at rates linked to inflation index thus saving the nation a lot of expenses that go into pilferage and administration/management costs as well as benefits going into non deserving hands which according to many admissions of political leaders account for 75% of the budgetary provisions made for this purpose.
The Finance Minister did talk about black money stashed in foreign countries because the failure of the government in bringing back this money can easily be attributed to international laws and complications. Why does he not talk about corruption and resulting black money available in the country itself, for that will require only an executive action which is well within the purview of the government provided it is sincere in its motives.
With these two inclusions the damp squib could be converted into an economic dynamite which could revolutionize the economic growth path as well as poverty mitigation programme of the government.