On the Budget - Aam Aadmi Khas masley (Common Man, Uncommon Issues)

Quetelet stands for the ‘average’ person. In India, politically this is referred to as the agenda for the ‘Aam Aadmi” . What we see, budget come and gone, is that today the ‘aam admi’ is confronting rising food prices, high rents, lack of adequate water and power and declining incomes.

Inflation as measured by the WPI has turned negative but inflation measured by the Consumer Price Index is still high and its emphasis is on food, a large part of the ‘aam aadmi’s’ expenditure.

There are fears of job losses and if a person is in business, there is a fear of slack business and slow turnover. The pace of manufacturing growth has been alarmingly slow.

What about the private investment so critical for industrial growth ?

If private investment is clogged, how can industrial production be competitive?

How can private investment rush in the current, interest rates scenario ?

If the government is going to go in for heavy borrowings as outlined in the Budget (fiscal deficit at 6.8 per cent), what is to allay the fear is that interest rates would rise by 1 percentage point ?

There is a serious threat of rainfall deficit this year in many wheat growing areas that could lead to high prices. The government has already banned wheat exports. What will the macro economy look like if there is a drought ?

Almost all G8 countries are resorting to protectionism and are imposing higher taxes on imports. The Obama Administration is discriminating against US companies that are outsourcing their business processes to countries like India. What is our position on this ?

In the case of Indian industry, many cheap imports, especially from China, are hurting our own manufactures but duties have not been raised. For example raising the duty on edible oil imports would have brought in a lot of revenue and would have protected oil seed farmers also. Who will satisfy the stake holders in this regard ?

The government is fond of putting more money on schemes which have fancy names but no one knows whether they are wholly successful .Even in the case of NREGA there is a fear that we are creating a dole dependent constituency. Why not create and enable them to have real income generating assets ?

Most small enterprises have to pay high interest rates on borrowings to run their businesses and the conditions of work are often quite appalling and the workers are routinely paid below minimum wages.

On health, most people do not need to crowd city hospitals if primary health care was available in the villages or small towns. What is the confidence in making a difference there in a hurry ?

Which school does the aam aadmi’s kids go to ? What are the assets those institutions have ?

The power situation is always a critical element in India’s growth. There has been a huge gap between the power requirement and its generation and supply — the government fell short by 70 per cent of the target to set up new power plants in 2008-09 and there are frequent voltage fluctuations and power cuts. Delhi and Bombay are no exceptions .Who will correct and by when ?

Unfortunately, while issues seem clear the policies are skewed by politics.
India is fortunately not in a deep crisis situation like the western nations — widely acknowledged now by the World Bank and the IMF, and even if there are no foreign investment inflows, our own high savings rate at 38 per cent (of the GDP) can sustain growth of about 7 to 8 per cent.

What remains important is to encourage private initiative and investment and the proper implementation of projects funded by public spending.