2:45 am - Wednesday July 17, 2019

Jobless, Stagnating Economy and Directionless Budget : चाणक्य विहीन चन्द्रगुप्तों की सरकार नहीं रूसवेल्ट, डेंग या नरसिम्हाराव चाहिए

Jobless Stagnating Economy and Directionless Budget : चाणक्य विहीन चन्द्रगुप्तों की सरकार नहीं रूसवेल्ट, डेंग या नरसिम्हाराव चाहिए

Rajiv Upadhyay

The Budget 2019 presented by Srimati Nirmala Sitharaman is a bad omen for Indian economy .

It is at best rp_RKU-263x300.jpgand directionless and at worst irresponsible and escapist in nature continuing the denial mode of the government .India has an inventory of 5 lakh unsold  cars and twelve lakh unsold house .As per CMIE estimates unemployment has reached near highest ever level of 8 % and one crore people lost jobs in 2018 . This is only the tip of iceberg , the consumer confidence is shaky and there is a general decline in demand in all sectors . It points out and confirms what was always a common knowledge that our GDP growth figures are bloated and fudged , The real growth by Vajpayee ans Manmohan era yardstick is only 5% per annum or even less .The government disowns these figures even if  the former economic advisor Arvind Subramanian and Reserve Bank governor Raghu Ram Rajan have echoed these feelings . With an income of 32 lakh crore government spent more than fifty lakh crore . The subsidies increased by one lakh crore in the election year . GST collections are still at best one lakh crore rupees and far less than old tax collection . A mechanism to evade GST systematically is now in place but government is blissfully unaware . Twenty  lakh crore rupee cash is now  in circulation which is far more than 16 lakh crore earlier . Elections are over but the government is still trapped in election mode with Socialistic rhetorics like taxing super rich . Thoughtless opening of our markets have driven out our MSMEs in despair and Tax terrorism has driven out our rich and capitalist class out of country . This needs to be redressed . In absence of real growth , instead of increasing earnings from increased new economic activities, it is forced to extract more tax from old tax payers . It must be understood that only our industrialists can make our economy progress and our middle class prosperity is essential for creating the much needed demand .  Over emphasis on spending on non economic social sector without creating wealth will ultimately rebound and limit government’s ability to muster funds for poverty alleviation.

It must be clearly understood that socialist rhetoric aside , economy and poverty alleviation needs upliftment of upper and middle class and support of industrialists. Last five years have not been very encouraging .

The pre budget Economic survey had pointed out that India needs a sustained economic growth rate of 8 % to become a five trillion dollar economy . It was expected that the new government its first year will take bold new steps to augment the agriculture and industrial growth . Increased demand is the primary requirement for industrial growth . The government made one announcement that it will set up a committee of experts to suggest areas in which government will invest 100 lakh crore in infrastructure . With an annual  revenue of only 32 lakh crore rupees  it does not seem possible so the government may resort to international borrowings as hinted in the budget speech . However our goods exports are stagnating at about Rs 300 billion dollars for last five years although the service exports have marginally increased . With uncertain exports and fluctuating oil prices the loan repayment capacity needs to be increased by greater exports  otherwise we will become another Pakistan . Budget was totally silent on these points indicating lack of thinking and preparedness .

It was not that easy options to increase demand were not available but in the election year government had spent almost one lakh crore rupees  extra on subsidies thus making it impossible to offer any rebate to any segment . The following steps could have helped increasing the demand .

  1. Capital gain tax on stock market gains could be levied after indexing the gain for inflation as in case of property. Any loss in tax could be made up by increased sale at higher value .
  2. The tax slab could have been revised to levy thirty percent tax on income above Rs twenty lakh. The higher income middle class is the big buyer of white goods .
  3. Ten years tax exemption for new investment in job creating industries in backward districts .
  4. One time  GST and registration tax exemption for purchase of unsold houses and increasing low interest exemption limit to one crore.

Just these four minor steps would have made enough impact to raise the stock market enough to increase demand for unsold cars houses etc . The lost tax would have been minimized due to increased sale . They can still be implemented by modifying budget proposals for nation’s benefit .

Government continues to deny the problem of economic stagnation and therefore is shy of solving the problem .

The return to the failed methods of Socialist Indira Gandhi regime is even more disturbing . The government proposal of borrowing huge money from international agencies for increased government expenditure on infrastructure  is an admission of its failure to create a market for normal commercial investment . Government expenditure is inherently wasteful . It is better to increase middle class earnings to boost demand and let private sector invest money in commercially viable projects. International borrowings need to be spent on projects which will increase earnings rather than on so called ‘ social sectors’.

This confused government thinking is a part of greater malaise . The government is anti intellectual and locked in its own echo chambers with low grade supplicant babus . Electoral victory has made it believe in its infallibility . It is not that we do not have person like Dr.Subramanian Swamy who still could guide the government . But real  intellectuals are proud of their knowledge and cannot be subservient and sycophants . Pride and originality is poisonous in new government which believes in compliance and servility of bureaucracy and loves unleashing its vast investigative power to subdue and discipline any upstart anywhere .

देश को प्रधान मंत्रि पर अब भी विश्वास है . परन्तु वह क्रियावान चन्द्रगुप्त हैं जो एक करोड़ घर या दस करोड़ बैंक अकाउंट या करोड़ों शौचालय बनवा सकते हैं . परन्तु उन्हें प्रचंड विद्वान् चाणक्य की जरूरत है . दुविधा यह है की चाणक्य चन्द्रगुप्त के मातहत या चमचे नहीं हो सकते .प्रधान मंत्रि को अभिमान छोड़ कर डॉक्टर सुब्रमनियन स्वामी सरीखे अर्थशास्त्रियों की सलाह लेनी चाहिए जिनकी बोल और दवाएं तीखी तो हो सकती हैं परन्तु कारगर सिद्ध होंगी . उपरोक्त सुझावों को यदि इसी बजट को बदल कर कार्यान्वन कर दिया जाय तो देश को बहुत फायदा हो जाएगा .

भारत के चीन सरीखे आर्थिक विकास के लिए रूसवेल्ट की नयी डील या डेंग व् नरसिम्हा राव की जरूरत है चापलूस दरबारियों से घिरी सरकार की नहीं .वित्त मंत्रि अभी नयी हैं , अर्थशास्त्र समझती हैं व् अभिमान रहित हैं . वह प्रधान मंत्रि की सच्ची सलाहकार हो सकती हैं यदि वह बाबुओं की गुलामी से निकल कर किसी मनमोहन , शौकत अज़ीज़ या मोंटेक को ढूंढ सकें .

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One Response to “Jobless, Stagnating Economy and Directionless Budget : चाणक्य विहीन चन्द्रगुप्तों की सरकार नहीं रूसवेल्ट, डेंग या नरसिम्हाराव चाहिए”

  1. July 6, 2019 at 3:33 pm #

    That is why you could not become FM !!

    My take on the Budget to FM-

    @nsitharaman

    Studied Budget-2019.
    It is out and out ANTYODAYA BUDGET with augmented emphasis on socio-rural engineering than on urban-eco engineering.

    Best wishes.

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