The much anticipated budget would be the centre of a debate in a week’s time. Albeit late in the day, ruminating over certain policy issues is still worth the while and hence is presented in this post.
Auto Industry: The increasing desire of the urbanites to own vehicles is a boost to this sector but a bane to economists who have to fret over the increasing crude prices and spiralling inflation. A fine balance needs to be struck to ensure that the growth in this sector is not dented but at the same time the inflationary causes are rooted out. The way out be to promote the manufacture of automobiles which would use solar energy and use crude only as a supplement to the shortfall in energy needs of the vehicle. This would ensure that India could set a new standard in this sector and also promote exports to nations in the Austro African belt besides South American and South European nations. The need to start on this as a medium term venture needs a policy boost by determining an Indian standard ahead of the Euro standards. The replacement of crude by gas would also be an alternative supplement. The first phase should ensure that all mass transport vehicles are mandated to comply with these requirements followed by a ten year phase out period for crude based vehicles on the road.
Energy: A policy statement by which any building which houses ten or more units to mandatorily install solar panels is to be considered as a regulation. This would mean that energy needs of these units would partially be met by the solar panels and the demonstrative effect would lead to more such existing units adopting it as an alternative thereby reducing the dependence on conventional power. The need to provide budgetary policy framework for installation of biogas plants and electricity generation plants from wet waste in every village or one for a radius of 100 kms would eradicate garbage menace and also provide supplementary energy.
Water: The need to use the heritage status accorded to Rani ka Vav to provide for such wells in the top 100 drought prone districts would ensure that water needs are met even in the worst situation. The need to target water harvesting even on public highways, flyovers, Government buildings and any building which holds 1 lakh sq feet of built up area would ensure that in years to come Indians need not fear rain deficits for basic needs. Sanitation should also be of principal focus and necessary provision to ensure sanitation is provided a 100% target for a period of 5 years should underline the priority this sector is being given.
Education: The need to spread the base of education is acutely felt. The Government institutions have fallen in standards. Infrastructure is poor and teachers’ payments are delayed by State Governments leading to it being no more a sought after profession. The policy in education is largely syllabus oriented with changes in power centres. However, the focus needs to be re-establish the pre-eminence of teachers. As a first step, the Centre should offer to share 50% of the education cess collected from a particular State, if the State has in the immediate preceding year paid out the salaries of teachers on time. Secondly, the need to shift focus to second and third tier towns for establishment of fresh institutions with IIT, IIM or Deemed University status is to be considered. This would reduce the need for the students of these realms to move to metros for their higher education needs. Each district should have at least ten schools being modernized in a single year. This would ensure that education is restored its pristine glory all round the country. As a pre cursor to these steps it would be necessary to earmark 5% of the budgetary support to this sector which holds the key to the success of the nation.
FDI : The hype of foreign direct investment needs to be viewed with some concern. One must bear in mind money does not flow without imposing obligations to cater to the needs of the investor. The large potential of the funds within the country remains untapped. The disinvestment policy needs to be replaced with a policy of raising fresh capital from domestic markets. This would tap the potential small investors and remove the need for the Government to provide such support. Sectors such as steel, petroleum etc could be thrown up for public issue wherein a restriction of 0.1% of the total shareholding is placed on a person/entity or group to be allotted the shares. This would eliminate corporate lobbies from acquiring these shares in anticipation of takeover. The need to preserve the fundamental principle that natural resources including economic resources should not be placed in the hands of a few should be the fulcrum of any policymaking.
Defence: The need to refocus on the security of the nation cannot be overemphasized. The motivation for recruitment needs to be rejuvenated. Import should be of technology and not products as for as feasible. The licence to manufacture in India should be made a precondition for purchase of the product to ensure that we are able to launch ourselves with a springboard and not be armtwisted by economies which run on defence procurements of other nations.
Sales Tax: A conscious decision to eliminate Central Sales tax would be the first step to GST. The Centre needs to show its willingness to part with its share to prod the States to conform for a uniform Sales tax regime. The VAT so collected should remain the revenue of the States but would be proclaimed centrally to ensure uniformity in pricing across the country. This would be largely compensated by higher demands resulting in greater excise and direct tax revenue.
It is time to cross my fingers in anticipation of how many of these anticipations match with those in the minds of the policy makers. Time would tell!