Deepak Laad
Budget presentation by the finance minister in the Lok Sabha sets off deluge of debates on the visual and print media. Clearly the sound bites provided by politicians, economists, industrialists are divided on party lines. Those on the side of the ruling party sing paeans to the point of cloying and those opposed to are at loss to find any redeeming feature in it. For next two to three days the budgetary allocations will be discussed, dissected and then everyone will go back to their chores, seldom turning back to inquire into the follow up.
Efforts to eradicate poverty have been afoot since the ‘Garibi Hatao’ years of Indira Gandhi’s tenure. That effort continued year after year, government after governments at the Centre introducing novel ways, yet today Indira’s grandson has to promise that if elected to power in the forthcoming elections his party will implement minimum income programme for the poor which makes fifty to sixty crore citizens eligible irrespective of the fact whether or not the nation can afford such huge expenses.
Like our PM, everyone of us too would like to see the dream of India as a developed country, but to make it possible the precondition is decent economic growth in vital sectors in a sustained manner whatever are the compulsions of populist figure crunching annual budget exercise.
Budgetary allocations on education and health are the most important but have the least priority in our country and are relegated as afterthought, subject to availability of fiscal space.
China two decades back realised the importance of making higher allocations for education that too more in higher education and research areas and today is reaping the benefits of that wise decision. During last five years China has spent about US $ 600 billions at an average of 7% of her GDP.
Because of that it could develop teams of scientists, technicians and engineers and is able to manufacture indigenously 5th generation stealth fighter planes like Chengdu G-20 and is set to have Fifth-generation wireless (5G) in a year’s time - the latest in cellular technology.
On the contrary our allocations to IITs and advanced research institutes have been relatively shrinking in recent times. It’s time we too started manufacturing of weaponry and defence equipment indigenously and spared ourselves from the dubious distinction of topping the list of the arms importing nation of the world. The famous economist Martin Wolf told the gathering in Delhi that today China is 25 years ahead of us. Never mind the slowdown of Chinese economy at its lowest in 28 years, as for a mature economy of $ 14 trillion, growth rate @ 6% to 6.5% is definitely not that bad.
Healthy citizens build robust nations so the Governments in developing countries have been spending larger sums on public health to keep their human resources fit. The US spends the maximum around 17% of its GDP on health. We too need to keep it at 5% or more instead of lingering around 3%. The need of the hour is to allocate an enhanced amount to government hospitals for purchasing new equipment to replace the outdated and defunct ones and increase the number of beds as patients in overcrowded hospitals are seen sharing beds or sleeping on floors and in verandas. Infant mortality on account of malnutrition is a major health related issue crying for attention and funds.
For more than 55% of our population, farming is direct source of livelihood, yet we have failed to assure farmers minimum support price at one and half time of the cost and the farmer continues to face income insecurity despite large and robust production across all agricultural sectors. The farmers are confronted with the dichotomy of high production and a high level of economic distress.
It calls for a robust agricultural strategy focused on giving farmers ability to monetize their produce at markets that offer optimal value for their production. After all those tall talks of fancy E-mandis, the farmer is still left to the mercy of avaricious parasitic middle men. Proper infrastructure to collect the produce of farmers and adequate facilities to store them are still lacking. Prime Minister Narendra Modi set a challenge to double the income of farmers but the ground realities are not encouraging. As the inflation based on consumer price index falls to 18 month low of 2.19% there
is decline in the price of vegetables ,fruits and eggs. The prices of wheat and other food grains too have dipped. As there is no corresponding reduction in the prices of fertilisers, seeds and insecticides farmer’s income has tanked. The chances of doubling of income in future too look bleak. The productivity enhancement alone will not solve the challenges faced by farmers. An associated improvement in their links to market and avenues to export are needed. “Instead of
resorting to loan waiver and input subsidising, cash transfer based approach is preferable” IMF chief economist Gita Gopinath rightly said from the side-lines of the recent World Economic summit at Davos. Generation of additional employment -- when the unemployment @9% is the highest in 45 years -- is one way of taking the burden off farm sector.
Services sector constitutes a large part of the Indian economy both in terms of employment generating potential and its contribution to national income and has undoubtedly, contributed robust growth in the post-liberalization era. Need of the hour is to boost the manufacturing sector and increase its share in GDP. Presently it accounts for 17% of the GDP whereas in China its share in GDP is 30%. Time we became competitive and increased exports and narrowed the current account deficit (CAD) which currently has widened to 2.9% of the GDP in the second quarter of the fiscal, against 1.1% in corresponding period a year ago.
We need to stimulate these sectors on priority basis in sustained manner. Merely offering populist sops with an eye on votes will lead the economy nowhere in a long run.
