Re India’s hidden wealth
It is said that a politician is obsessed with the next election, while a statesman plans for the next generation. Fresh from the Congress party’s unexpectedly good showing in the general election of May, you had a great opportunity to imprint yourself as a statesman upon the national consciousness. But again, you blew it.
In your Budget 2009-10, presented to Parliament and the nation on July 6, you have made generous and indeed overdue, allocations for the rural poor under the National Rural Employment Guarantee Scheme, Bharat Nirman, Rajiv Gandhi Grameen Vidyutkaran and Indira Awas programmes. But it is contendable that these allocations, overdue and justified as they are, have been made with an eye on the next elections shortly due in Maharashtra, West Bengal and several other states. Unfortunately you forgot to make anywhere near sufficient provision for the next generation. Budget 2009-10 provides only Rs.44,528 crore — a mere 0.79 percent of GDP — for education, primary, secondary and tertiary.
No doubt the huge revenue (Rs.282,735 crore) and fiscal deficits (Rs.400,996 crore) projected in the budget deemed necessary to stimulate the economy, inhibited you. But there is hidden wealth within the Indian economy which you could have freed up for investment in education of generation next.
For instance, by introducing a regime of targeted, rather than indiscriminate, subsidisation of higher education, electricity, water, food etc, you could have reduced your subsidies outlay of Rs.112,000 crore by at least 30 percent and deployed the Rs.33,600 crore saved into improving the abysmal primary education infrastructure. Likewise by taking the bold initiative of permitting the defence forces to earn a part of their keep by utilising their excellent engineering corps for executing civilian infrastructure projects, Chinese style, you could have saved 25 percent (Rs.35,250 crore) of the defence outlay of Rs.141,000 crore. These two initiatives on their own would have enabled you to equip every government primary and upper primary school countrywide with a library, laboratory and lavatories.
Moreover there’s sufficient additional hidden wealth in the Indian economy to enable you to make handsome provision for the health and nutrition of gen next, and reduce the huge annual interest payout bill of the Central government (Rs.225,000 crore in 2009-10). According to a Morgan Stanley Research study, the current market value of government companies (including unlisted enterprises) is a humongous Rs.2003,000 crore. And given that most of them are inefficiently managed, why can’t you sell some off every year to raise Rs.100,000 crore for investment in the education and health infrastructure and debt retirement?
The point, my Dear Sir, is that given India’s factor endowment of the world’s largest child population — 450 million Indians are below the age of 18 — and since you cannot cut your revenue expenditure, it’s high time you abandoned the current deficit financed budgeting system of sprinkling small amounts across a broad front, in favour of focused, thrust areas budgeting. Thus next year the focus should be on education, the following year on law and order and the year after, the judiciary.
Sir, if you don’t break with past practice, you will be sowing the dragon’s teeth of revolution and anarchy. Seize the opportunity to make good the electoral mandate given to the Congress party in the recent general election, and think out of the box to go down in Indian history as a great Union finance minister, rather than another also-ran.
Yours sincerely,
(Dilip Thakore)