It was almost 62 years ago when the founding fathers of free India promised to the hundreds of millions of long suffering but still optimistic Indians that their tryst with destiny had come to fruition. They might as well wait for another 62 years before India can dream of becoming a developed nation with a standard of living that comes anywhere close to where the developed world stands today in 2009.
At the time of Independence, there were about 350 million Indians. Today, there are more than 350 million Indians living in abject poverty, and most of the remaining others (other than the highly privileged sitting in the state legislatures, the Parliament, the government, and then the top 15 to 20 per cent of the population) continue to live a life that is a daily struggle — be it access to clean water or uninterrupted electricity or comfortable housing or unclogged roads or a safe and secure environment.
Indeed, the challenges of modern India are so humungous that year after year, bold and extraordinarily visionary steps are needed from the political and bureaucratic leadership to pull India out of the deepening trough of poverty and unmet but legitimate expectations of hundreds of millions of ordinary Indians.
Yet, year after year, successive Indian governments continue to take pygmy-like steps. And most finance ministers of recent years have taken to near trivialisation of the extent of the challenge the nation faces by resorting to quotes from titans and visionaries that sound inane when read out by the leaders of the day.
The budget speech of the finance minister of the newly installed UPA government has been no different with references to Kautilya and Mahatma Gandhi, and in the same breadth, finding it important to mention about introduction of customs duties on set top boxes and elimination of excise duty on branded jewellery!
Indeed, India needs visionary and firm leadership more than ever before and expectations justifiably ran high from the new government. India needs paradigm-breaking thinking in just about every sector of the economy, be it agriculture, physical infrastructure like roads, power, railways, aviation, healthcare, education, manufacturing, and national security.
It is also clearly understood that the magnitude of required financial resources to meet all these deficits in public and private spending requires extraordinary creativity in finding the means to generate such quantum of financial resources. This means a multi-pronged effort in widening the tax base, plugging leakages of revenues through myriad tax exemptions and loopholes, attracting private capital from across the globe through investor friendly policies.
The government should also encourage the flow of small savings of millions of Indians into new productive investment opportunities, curb its wasteful expenditure and divest its current productive and non-productive assets so as to reduce the deficit caused by its own profligacy and create capital that can be more productively deployed for meeting its social obligations to the really underprivileged.
Alas, the Union budget presented on the July 6 again reflects the “think small-act small” attitude of the current political leadership. Till recently, it was convenient to direct all the blame for inaction on to the Left and select other parties and individuals within the old UPA. The current government had a chance to make good on what it could not purportedly do in the previous five years.
Unfortunately, there is nothing really path breaking in the new budget that can give confidence to the nation that the new government is serious about hitting a GDP growth rate of 9 per cent and meeting the FRBM targets in a hurry. Sure, one can find some solace in increased spending on social schemes such as NREGA and enhanced allocations for NHAI and JNNURM.
Well, it is good to see irritants like FBT and surcharge on personal income tax being removed. The most diehard optimist can also see silver lining in the fact that despite the runaway fiscal deficit, the government has not imposed or substantially enhanced the current direct and indirect taxes other than making some minor adjustments to remove anomalies.
One can also optimistically believe that everything cannot and need not be done only on the budget day and that many important policy changes and announcements can, indeed, be carried out throughout the years ahead. Yet, with most of the Indians facing a crisis of confidence in the last few months, and rest of the world still mired in deep economic morass, it would have been a fair expectation from the finance minister on the budget day to inspire optimism in India’s economic future, and trust from all within India and then many outside India in the UPA government’s seriousness and capabilities to lead India in these challenging times. Indeed, such hopes have been belied.
The writer is chairman, Technopak Advisors
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