Economic
Highlights
New
Delhi, 29 April 2024
New GovtMust Cut I-T
REBOOT PSUS FOR JOBS
By Shivai Sarkar
Despite
it being too early to discuss the Union budget to be presented in July, it is
certain whichever combination comes back to power it would have to majorly
review the February interim budget in view of the debates generated during the
course of elections.
The
election is veering round more on economic issues than religion or the Ram
temple, though in certain regions these remain potent issues and so too the
brand Narendra Modi and Yogi Adityanath. A larger section is concerned of the
core economy, unemployment, farmers issues, irrationally high prices, medical
and health care costs, school and university fees, shooting costs of houses,
high toll-jacked inflation and similar other issues.
Even
showcasing of Indian economy as the fifth largest economy is not being accepted
as reality by a large section. The farmers and citizens wonder while cars and
tractors are allowed to run for 40 years like aircraft across the world, why a
pro-people government should in a tearing hurry to send these to junkyards in
India, particularly when household debts are skyrocketing. The rural wisdom
calls it weird and tries to locate the linkages of government functionaries
with the car makers.
Questions
are also raised on the Rs 16.87 lakh crore debt repayment in 2024-25 budget.
This effectively cuts the actual budget of Rs 47.65 lakh crore to about Rs 31
lakh crore. Repayment burden in 2025 is slated to be higher. The Opposition
sharp angling on core economic issues is being rebutted by ruling combine by
charging that if the opposition gets to power it would sell “mangalsutras”
and delve into divisive politics. The Election Commission has issued warnings
to the ruling party for its wry comments.
Low
voting in 190 constituencies in major states like Uttar Pradesh, Bihar and
Maharashtra raise concern among all parties. The voter is apathetic despite
many moves by the Election Commission. Is that a reflection on governance?
This has
not put the issues on the backburner. According to RBI, inflation rise at 5.5
percent a year has shot beyond 55 percent in compounded terms causing huge rise
in the prices. Nobody has got such a raise in their salaries, not even
government employees. The new government would have to take drastic steps to
bring down the prices of edible oil, food grains, vegetables, potato and onion
as also school fees and expensive health care, milk and other commodities.People
are unwilling to buy the argument that inflation is built into the system. They
rather equate it with corporate electoral bond doles to parties. The government
accepting the petrol prices are high, cut it by Rs 2 just before the polls. It has
no impact on the voters’ psyche.
The
voter is not happy with the so-called demonstrative developments like
demolition and construction of large office buildings, rail stations, rampant
construction of roads or metro. Constructions devastate the hills of Himachal
Pradesh, Kashmir, Uttarakhand and the NorthEast. Kisans who became millionaires
overnight with acquisition of their land for roads are not happy for losing
their livelihood. And most villagers rue the roads that divide their habitats
and relationships for a road they can’t use without paying toll. It is a
serious issue because the kisan also pays Rs 30 per litre petrol cess toll
introduced with the promise of ending the toll. All these benefit bulk
profiteers and least of jobs.
A new
government has to initiate drastic changes and reorient policies. A major
reason of the joblessness is attributed to ad hoc decisions. Such constructions
erode government finance and build little asset. Southeast Asia tried it in
late 1990s and got into trouble in 1997. It would be wise on the part of the
new government to revive PSUs and ask the private sector to compete with them.
It would create jobs, add to national economy and create a fair playground.
People
question rationale of parting a part of Indian Oil to a private giant or giving
out ports to private players. At least one such port has become notorious for
being smugglers’ den.The universities, IITs and government institutions have
been given a mandate to raise tuition fees every year. The private ones hike
far more. Schools and universities need financing by the government and
education cost must be cut down. Congress promises apprenticeship to every
graduate. Looks good but it is not practical. The scheme has failed a number of
times.
India’s
overall exports fell by 8.1 per cent and exports to its free trade partners
shrank by 18 percent in the first half of 2023. The country’s trade deficit
ballooned to $78.2 billion in the last financial year. India’s export values
across all commodities declined to $351 billion during April-January from $366
billion a year ago, underlining the impact of global economic slowdown and
tightening of interest rates in Western countries.
These
numbers have emerged amid India’s push to sign free trade deals with the UK and
the European Union. The International Monetary Fund says that global slowdown
is on. Howsoever India projects its march to $5 trillion economy, it is not
easy. The West becomes more protectionist and keen on imposing carbon tax. The
West needs to protect its own bread.
Lower
productivity can result in reduced job creation within the manufacturing
sector, leading to unemployment or underemployment. The International Labour
Organisation finds low pay and wages as serious challenges.When productivity
declines, the incentives for firms to invest in research and development or
adopt new technologies diminish, leading to a slower pace of the manufacturing
sector.
But the
challenge of rising household debt and falling savingscould weigh on long-term
growth sustainability.The FDI flow is low at $ 17.96 billion. Despite a
supposed buzzing market it has not risen much.The new government also has the
challenge to cut personal income-tax rates from 39 percent to 22 percent in
tune with the corporate tax. High taxations hit the purchasing capacity and
concomitant market problems.
In
short, the new government has to stress on issues regarding taxes, education,
health, livelihood, low tolls and better deal to farmers. Both manifestos of
BJP and Congress speak of too many doles and caste related benefits. If the
government can address the basic issues and make it one of the most affordable
economies, India’s journey would be smooth.
It is a dream, if comes true it would be the most liveable country.---INFA
(Copyright, India News &
Feature Alliance)
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