By Shivaji Sarkar
India needs to deglobalise its economy. The benefit of it must be taken but it has to set a trend for the world so far 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 check has to be introduced on the businesses for fixing prices.
The budgetary processes begin now. The 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 average people, have 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 threats of further swindling.
The country has seen that since 1993, when coal blocks were sold to private companies, the banks have become extremely vulnerable. The private coal extractors have caused harm to the government and the banks.
Bank deposits are public money. How could money be utilized for private profits? Nobody has so far asked why these companies, many of them having 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 have not helped the country during the past about 20 years. Prices are on free float. It has no relation the cost.
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 average family income is around Rs 7000 a month, and in many cases less than that.
The period, particularly the last 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 central budget.
When people want deglobalisation 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, severe and at times violent agitation.
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. They were in a planned manner almost eliminated so that they could not produce goods at affordable rates. Their demolition eliminated competition and strengthened large monopolies, who 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 the 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 the businesses.
A system of heavy market competition by encouraging the middle, small and micro – khadi type – entrepreneurs to enter into the manufacturing has to be ensured for the success of “make in India” at lower and competitive prices.
The 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 them. He is relevant not only for “swachha Bharat” but also for the revival of micro and small sectors. First prime minister Jawaharlal Nehru ignored him 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.