Friday, February 22, 2013

INDIAN BUDGET 2013 : WHAT COUNTRY NEEDS ??

Annual budget is a yearly exercise of the government to take stock of the financial activity of the government for the year gone by and present what the nation should expect in the coming year. All these years it had been more or less an administrative effort in accountancy without any coherent and rationalized approach to the future of the country and its citizenry. It has always been  an exercise of reducing and increasing some taxes or in other words a simple balancing of collections and expenditure. The directions will depend upon the whims and fancies of the government, the urge to please one sector of industry or the other or the necessity to fool common man for his only asset 'the vote'.
The country in general and the common man in particular has waited patiently for umpteen number of years for some magic to happen because of the so called all sincere efforts of the rulers of the country but alas we are neither moving towards the status of a global superpower nor towards the often repeated slogan of poverty alleviation. At best India's journey all these years can be described as a journey towards some degree of industrialization, that too in patches and in fits and starts which has failed to impact the lives of the poor in any significant manner. In fact it appears that the economy is simply directionless as far as Indian chance of becoming a global superpower is concerned. India has all the where with all in terms of all natural resources including a huge human resource, managerial, technical, skilled and unskilled with favourable demographic mix coupled with a fairly large economy. Still if India fails to get its rightful place in the next decade or two, it will be because of the absence/lack of wisdom, vision, far sight and statesmanship in the polity.
The country's economy is in a spin and is riddled with the problem of high inflation and dwindling GDP growth rates accompanied with continuous rupee devaluation vis a vis other currencies. Everyday one hears about the wish list of expectations of various groups from Indian budget 2013. The stock market guys want some measures to improve the feel good factor, different industry sectors want sops and concessions to their own sectors, the middle class expects some concessions in direct taxes and fuels, while a vast majority of Indian polity which survives and thrives only on its ability to dole out freebies, subsidies and sops to the poor have nots out of the public exchequer is gunning for this vote catching rhetoric. There are no quick fixes to  the problem of high inflation, rupee devaluation and slowing down of growth. In a scenario where the economy needs solution to the problems of high inflation, current account and fiscal deficits:  
  • The first and fore most concern of the finance minister ought to be bringing down inflation considerably as a matter of fact much below the so called tolerable limit of the economists of the country. By now the ineffectiveness of monetary actions of the Reserve Bank of India (RBI) and the huge slowing down of economic growth rate thereof should set the polity thinking on an integrated approach to  ECONOMICS, GOVERNANCE AND INFLATION IN INDIA
  • Current Account deficit should be the next priority of the government and a temporary fix might be achieved somehow or the other but a long term and  permanent solution will emerge only when a solution to the thorn of oil economics in the Indian growth story  along with reducing gold imports which thrive on the black money availability, is found out.
  • Topmost priority to the next gen growth engines, like
  1. Corruption Mitigation and Good Governance - The Biggest Growth Engines for Indian Economy:  Whole of India is aware of the corruption and the resulting black money. In fact if by any sincere means the government can mitigate it and bring back major amount of parallel economy to the mainstream economy, the Indian growth story can be hastened up tremendously along with wiping out the demon of fiscal deficit.

  2. Infrastructure and Human Resource Development: Next Gen Growth Engines of Indian Economy : The right mix of rail, road and waterways for transportation of men and material has a multifaceted beneficial effect on the economy in terms of job creation, increasing demand of steel and cement, efficient, low cost and timely movement of industrial goods and agricultural produce, and above all cutting down of oil and fuel costs. Priorities in human resource development to increase the earning capacity of an individual alongwith increase in productivity will go a long way in poverty alleviation and growth rate sustainability.

  3. Indian Energy security - the next gen growth engine : Nothing can be achieved with shortage of electricity in the growth story of the country and the aim of providing a comfortable and meaningful life to a common man.