We all know that a section of a bridge under construction for the Delhi Metro collapsed recently.
We know that Mumbai has a huge issue of water logging every time heavy rainfall coincides with the High Tide.
Now :
- Who is the Mayor of Delhi ? Of Mumbai ?
- What is the Delhi /Mumbai /Bangalore /Chennai progress plan vs Budget ? Is there a commonly understood vision that has been articulated in the past ?
Politically, Urban India is orphaned. Economically, it can’t avoid being at the center stage.
Urban Indians do not represent a constituency. Else the National Rural Employment Guarantee Act (NREGA), which will spend Rs 39,000 crore in giving every Ruralite a chance to earn would not be specified as ' Rural' .
Traditionally and more so since economic liberalization, Urban India is the only route to future growth. This is where we see economic activity, creation of jobs, greater private investments. Urbanites pay taxes.
- Where is a 360-degree plan for our 6 metros ?
- Why is no one stating plans for power, ports, highways and airports in a city specific manner?
At least 60% of our gross domestic product comes from urban India; it houses 30% of our people.
- Why can we not have a vision to create 6 more metros in the next 30 years ? Why has urbanization been a “Chandigarh in limbo” most of the time
?
Consider :
- Are we thinking and funding affordable housing ?
- Why are we not seeing the potential of bringing in public-private partnership in urban infrastructure development?
The first Budget of the new Union government does not seem to indicate that they see their clear mandate as a clear Urban India mandate too.
Rome was not built in a day, but on a day they may have budgeted for it to start !!
Showing posts with label India Budget. Show all posts
Showing posts with label India Budget. Show all posts
Sunday, July 19, 2009
Thursday, July 16, 2009
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.
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.
Tuesday, July 14, 2009
On the Budget - Budge It !!
The more things change, the more they remain the same...
India watchers could well make this conclusion going by the budget that Mr. Pranab Mukerjee presented.
Going by the finance ministry’s own Economic Survey, published a few days prior by its economic advisers there is a lot that has been left ‘not done’. The survey had presented a bold wish-list of reforms, including divestment of minority stakes in PSUs, easing restrictions on foreign direct investment (FDI); and even rethinking of labour laws.
What was seen was good old ‘tinkering’. No FDI caps were lifted, not in retail, not in civil aviation, not in Insurance.
What was of universal concern was the outcome that the central government’s deficit would widen to 6.8% of GDP in the year to March 2010. Add to it the state Government indebtedness and we will see the deficit in low double digits.
With the communists gone, the situation is similar to that of a recovering patient who has been in a cast for a long time. When the cast is cut off, lo and behold, it discovers it has forgotten to walk. It then needs to relearn walking. When it looks around, it discovers that many of the celebrated sprinters are suffering from multiple fractures. By all accounts India has weathered the global recession better than most. Our GDP grew by 5.8% in the last quarter of 2008, and in MQ of 2009. Much of it spurred by Government directed spending. It won rich dividends in terms of a electoral victory. The government wants to dole out more.
Our finances are precarious; debt approaches 80-85% of GDP. Are we recognizing that?
Handing out generous terms to Govt employees and enhancing the ear marked funds for disbursal under the National Rural Employment Guarantee Scheme will exacerbate the situation. Why are we convinced this is so required ?
Only the promise to introduce a nationwide goods and services tax (GST) by April 2010 is the bright spot. Unfortunately, the GST requires the all states to be on-board, and they guard their revenue-raising powers jealously. India’s tax regime on spirits is one case in point. Currently center-state powers are thus allocated that it bars states from taxing services, and prevents the central government taxing goods beyond the point of manufacture.
We need 'artha' to be the 'mool' of 'rajasya' not the other way around !!
India watchers could well make this conclusion going by the budget that Mr. Pranab Mukerjee presented.
Going by the finance ministry’s own Economic Survey, published a few days prior by its economic advisers there is a lot that has been left ‘not done’. The survey had presented a bold wish-list of reforms, including divestment of minority stakes in PSUs, easing restrictions on foreign direct investment (FDI); and even rethinking of labour laws.
What was seen was good old ‘tinkering’. No FDI caps were lifted, not in retail, not in civil aviation, not in Insurance.
What was of universal concern was the outcome that the central government’s deficit would widen to 6.8% of GDP in the year to March 2010. Add to it the state Government indebtedness and we will see the deficit in low double digits.
With the communists gone, the situation is similar to that of a recovering patient who has been in a cast for a long time. When the cast is cut off, lo and behold, it discovers it has forgotten to walk. It then needs to relearn walking. When it looks around, it discovers that many of the celebrated sprinters are suffering from multiple fractures. By all accounts India has weathered the global recession better than most. Our GDP grew by 5.8% in the last quarter of 2008, and in MQ of 2009. Much of it spurred by Government directed spending. It won rich dividends in terms of a electoral victory. The government wants to dole out more.
Our finances are precarious; debt approaches 80-85% of GDP. Are we recognizing that?
Handing out generous terms to Govt employees and enhancing the ear marked funds for disbursal under the National Rural Employment Guarantee Scheme will exacerbate the situation. Why are we convinced this is so required ?
Only the promise to introduce a nationwide goods and services tax (GST) by April 2010 is the bright spot. Unfortunately, the GST requires the all states to be on-board, and they guard their revenue-raising powers jealously. India’s tax regime on spirits is one case in point. Currently center-state powers are thus allocated that it bars states from taxing services, and prevents the central government taxing goods beyond the point of manufacture.
We need 'artha' to be the 'mool' of 'rajasya' not the other way around !!
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