Dear FM

Tough times, while crashing the heavens down, bring along the most needed commodity of our times: common sense. With the air filled with optimism over bouts of recovery from the financial crisis, the finance minister will understandably be reluctant towards radical reforms. However, unshackled by the Left, this is the perfect moment for FM to rev up the economy, with his feet anchored on the fundamentals. A simple study of the previous budgets over the decades reveals that the non plan expenditure of the government has been greater than the plan expenditure for the past forty years. Moreover, interest of past payments has been more than three times the fiscal deficit. FM should look at reducing the non plan expenditure while increasing the share of the plan expenditure.

The government would do well to bring in more accountability in the defence expenditure, which has seen massive collapse in the national security of the state after 26/11 attacks despite its lion share in the budget over the recent years. Defence public sector units must be spruced up to bring in more accountability in their operations. It is high time government sheds its inhibitions and encourages participation of private players. With more room for manoeuvre, FM should not hesitate to administer infrastructure industry with ample cash transfusion and remove procedural hurdles to expedite pending projects. As per a recent report, India needs an investment of $500 billion till 2012 to upgrade its infrastructure and sustain a 9 per cent average annual growth in the economy.

If government is serious about ‘aam admi’ and his woes, it needs to take concrete measures in agricultural sector instead of offering ‘waiver’ palliatives. E-choupal and other innovative schemes should be implemented across the breadth of the country with enhanced scope to provide access to foreign markets. Food processing industry should also be nurtured well to manage the produce. They need to rise from their cooperative system to professionally managed corporations by including farmers as stake holders. The after math of the US financial crisis has left the export sector crippled. In addition to the tax holidays for export-oriented units and SEZ units, govt. can also lay the road map for Health Care Special Economic Zones to cater to the increasing trend of medical outsourcing to India in terms of medical tourism.

These recommendations for various industries look mounting amidst the widespread panic regarding the fiscal deficit. It is pertinent to note that the slowdown in India has led to the shrinking of the total economic pie, thus making the fiscal deficit look more alarming than it actually is. Government need not worry about fiscal deficit as long as it strives to maintain the tax slabs and add reserves to its coffers through divestment of PSUs,3G spectrum auctions and opening up of FDIs in retail and aviation

Dear FM, carpe diem, for the entire nation awaits your budget with a smidgen of hope for better days ahead.

2 comments:

Word Sorcière said...

Good to see you back on the blog front. I had almost given you up as a, fly by night blogger (pun intended). Welcome back.

Venky said...

hee hee..:) thanks..will be writing regularly from now onwards.. have been writing quit a lot lately