Economic
Highlights
New Delhi, 21 November 2014
Revival of Economy
REMEMBER GANDHIAN MODEL
By Shivaji Sarkar
India needs to de-globalise its
economy. The benefit of it must be taken but it has to set a trend for the
world insofar as pricing of commodities and taxes are considered. It also has
to look for ways to integrate and depend on the cash economy. Rampant increase
in Government spending has to stop and a system of checks has to be introduced
on the businesses for fixing prices.
The budgetary processes begin now.
The BJP-led NDA Government has to look for ways to break from the past. The budgetary
projections would succeed if there remains stability in the market, prices do
not rise and bank funds are not swindled away by large borrowers. Banks, having
deposits of the average people, have sadly lost money during the past few years
to the tune of Rs 240 lakh crore.
Despite prices not coming down there
is a demand from the businesses for lowering interest rates. There are also
discussions on how to deprive the RBI, which, with its limited powers, has somehow
been able to protect the banking system from collapsing. If interest rates are
reduced it would greatly harm the depositors and threaten the banking system
with danger of further swindling.
The country has witnessed since 1993
that when coal blocks were sold to private companies, the banks have become
extremely vulnerable. The private coal extractors have caused harm to both the Government
and the banks.
Remember, bank deposits are public
money. How could money be utilized for private profits? Nobody has so far asked
why these companies, many of which have overflowing reserves, did not put their
own money into these ventures.
If public money has to be swindled
for privatization, the country today needs to introspect why coal, petroleum or
any other mineral should not remain with the public sector. The private sector
and multi-national proliferation has not helped the country during the past
about 20 years. Prices are on free float. It has no relation to the cost.
Additionally, jobs have not
increased. Workers are exploited in the name of labour reforms. Incomes of most
families have decelerated. The Government’s Central Statistical Organsiation stated
that the average family income is around Rs 7000 a month, and in many cases
less than that.
The period, particularly the past
ten years, has seen phenomenal rise in profits of all companies and spiralling
rise in prices of essential items. The connection is evident. The corporate
have gained. Small, medium entrepreneurs, the workers and common man have
suffered. People want this trend to be reversed in the next Union budget.
When people want de-globalisation
they want a check on this trend of loot. The West has eroded its systems. The
corporate call the shots there. Despite that over the years they have built
systems to break monopolies, track the pug marks of corporate and correct
these. This nation has none.
During the licence-permit raj there
were a few business families who made enormous profits and the country for
their misdemeanor suffered severe inflation leading to destabilisation of the
government and severe, at times violent agitations.
The globalization, when introduced
by Manmohanomics, was projected as panacea by ensuring that markets would
decide demand, supply and price. Instead, it demolished the social control and
left everything to the corporate. Even roads, where the common man could trudge
freely have become paths to profits. India has the highest toll rates in
the world.
Small businesses suffered the worst
onslaught. In a planned manner they were almost eliminated so that they could
not produce goods at affordable rates. Their demolition eliminated competition
and strengthened large monopolies, which are now virtually dictating the State
to accept whatever they demand. The workers and trade unions were the worst
hit. They could neither demand job security nor hike in wages.
The rampant destruction of the
social system has heavy cost on the State. Its cost for project implementation
has increased. The deprivation of jobs had to be substantiated with schemes
like MNR employment guarantee scheme. It is a clever corporate ploy to keep in
check severe discontent of the populace against their perpetrators. The
government machinery was utilized once again to protect them.
As costs of projects increased, the Government
has gone on increasing taxes. The GST is to make all commodities expensive as
traders even with a daily transaction of Rs 2800 would have to pay it. Income
tax is at its irrational best. People with income of Rs 25000 a month have to
pay one-third of it as taxes. Indirect taxes rob people of another 40 per cent
of their income. Even a beggar pays an indirect tax.
The last 20 years have seen the
worst exploitation of the populace. The socialist tax rates combined with
capitalist high profits have eroded the basics of the country. The large
businesses and multi-nationals have ensured that without big pockets no
businesses could survive in India.
It would be too much to expect from
literally the first Budget of Narendra Modi government. But there are high
expectations and the Government must not disappoint. People want the Budget to
set a trend for the next 20 years.
The GST that only helps large
businesses should not be a priority. It helps large businesses but imposes
heavy burden on the Central government for compensating the States in the name
of ease of business. It should better be shelved and the Centre should
facilitate the States to confabulate among themselves for a uniform or near
uniform State tax rates. The Central government should not become the middle
man for businesses.
A system of heavy market competition
by encouraging the middle, small and micro – khadi type - entrepreneurs to
enter into manufacturing has to be ensured for the success of “make in India” at lower
and competitive prices. Sadly, rural manufacturing that sustained 70 per cent
of the population has virtually come to a naught. It needs revival to create
the variety in manufacturing.
Mahatma Gandhi spent his lifetime
for improving their lot. He is relevant not only for “Swachh Bharat” but also
for the revival of micro and small sectors. The nation’s first Prime Minister
Jawaharlal Nehru was oblivious, let Modi come to their succor. A combination of
these steps would bring in the required qualitative change in economy and
growth of the country. The Budget process is expected to achieve this dream.
--- INFA
(Copyright, India
News and Feature Alliance)
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