Apolitical aspirations

 Apolitical Aspirations of a Common Bharatiya

The time is 3.00 P.M. and the date is 31st May 2024. Three hours from now, the final (seventh in number) phase of Lok Sabha elections for 2024 will come to an end. Exit poll predictions from the media will occupy our pastime tonight and may extend well into the morning and noon of tomorrow. The actual results will be known by the afternoon of 4th June 2024.  What can be a better time than now to air my wish list for the new government that will be sworn in anytime after 4th June 2024. 

I term my wish list as 'apolitical aspirations of a common bharatiya (indian)'. 

• Inequality in income widens: India is the fifth largest economy in the world and is expected to move to position three in the early 2030's. Though it is a happy news, the inequality in income among individuals has widened appreciably. Mental work seemingly get better compensation than work done through physique. The government should spend time on this.

• Under-employment/  Unemployment is on the increase: While creation of new posts in the government departments is bound to be limited with full computerization cutting down the layers in meeting payment and collection functions, it is equally true that millions of graduates/post graduates/diploma holders pass out of the education institutions every year. Solution has to be a combination of self-employment, creation and expanision of employment oriented industries/clusters, infra development, intensifying agriculture oriented jobs, etc.

• Fiscal Deficit to be used for Capex to boost economy and employment: Today's news reports indicate that the fiscal deficit for 2024 is estimated to be 5.6% ( lower than revised estimates of 5.8%). Of course, this is a good news if the increased revenues helped in achieving that without any reduction on planned capex/welfare consumption expenditure, originally set out in the budget. It is always a better proposition to overshoot a fiscal deficit, if it serves the future as well as the common man than remaining within fiscal deficit to receive appreciation of the 'economic elite'

• GST needs a closer look to revise it for the benefit of the common man: Direct and indirect taxes have shown a growth of more than 20% year after year. While this indicates compliance by persons responsible for paying taxes, it should be remembered that indirect tax, most of which is in the form of GST, is collected by the sellers of the products and goods from consumers and is passed on to the government. Whichever party rules at the centre/states, there appears to be a tacit understanding to protect the revenues generated through GST. The blame game is on but both are willingly leaving GST untouched. The new government should look into GST on products and services that are increasingly used by majority of the population and take urgent steps to remove them from the list or reduce the rates effectively.

• Large Petroleum Companies have to rationalize the fuel rates: The fuel rates went up vertically, when the global economy showed signs of recovery and the crude oil prices touched USD 100 per barrel. But for the last two years, the crude oil prices are hovering around USD 82-83. The petroleum companies have not announced any reduction, though a meagre reduction in excise duty was undertaken by the central government and some of the state governments. The new government, elected by the people of India, should urge the large companies for reduction in fuel prices to reflect actual cost plus reasonable margin of profit for the said companies

• MSP for all products of farmers: Sooner or later, a white paper should be released by the government on the factual position. While doing so, farmers holding up to 10 hectares of land should be facilitated to gain maximum income in the sale of their produce with MSP to kick in at certain defined situations.

• Rs.6000 dole for farmers is not enough: R.6000 per annum is done by way of direct benefit transfer (DBT) to all identified and registered farmers accounts every year in three instalments. Is this enough? Certainly not. MSMEs appear to get adequate credit thanks to MUDRA scheme and credit guarantee funds created for loans to the sector. But no such scheme appear to be in hand for agriculture. The growth in credit to agriculture in majority of commercial banks is seen achieved through agricultural gold loans and not through crop loans/allied activities. Financial needs of agriculturists should be supported to ensure no let up in agricultural production

• Continued resilience of the financial system: Regulatory actions on certain banks/NBFCs, increased risk weights on personal loans, suggested increase in provision norms in project finance do suggest the concerns of the regulator in the way the lending is resorted to by the regulated entities (REs). The government should be in constant engagement with the regulator on the issues that crops up in the systems so that they do not develop into a deep crisis later on.

• Continue NREGA scheme with focus on increased productivity: The scheme appears to have addressed the welfare of the rural families by assuring minimum wages and minimum number of days of employment. But no data is available as to how this has helped in revival of the rural economy. The new government can combine the welfare of the rural families and uplift of rural economy, while revamping the scheme in an exponential way.

• Social Security Schemes: Majority of senior citizens are without pension and insurance benefits. The share of this population keeps on increasing. There is an urgent need to address this issue especially by simplifying health insurance and monthly pension of a decent amount to poor seniors.
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• Concession in railway tickets to senior citizens: This was a concession extended to senior persons as a recognition to the contribution made by them to the society in their active years to mitigate their financial burden in their last leg of life. The concession withdrawn during COVID is yet to be restored. The political party rules the country, where compassion plays a big role than profits, which is a term applicable to corporates. Hope the new government restores it as early as possible. 
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• End the debate on Old pension versus New Pension Schemes: NPS replaced old pension scheme for employees, who joined state and central governments since 2004 and PSBs since 2010. As a populist measure, some state governments brought back old pension for all the government employees. It is unviable and biased as it benefits only a few in the government service as against lacs working in private sector. It is a burden on exchequer. The best way to end the debate is to establish confidence in the minds of govt. employees that NPS would give better monthly payouts, at least equivalent to that is guaranteed under old pension scheme. The government should engage PFRDA and the NPS players for this purpose. 

Regards

V.Viswanathan

1st June 2024