NaMo Govt.: Replica of the past policies By manohar manoj

   NaMo Govt.: Replica of the past policies 

By manohar manoj                                      

When NAMO invited several SAARC countries leaders at the time of his oath ceremony, it seemed this government will start a new leak of her actions and governance, but now it looks very disappointing to see this new NAMO government, just following the policy path of earlier UPA government. The BJP led new NDA government which roughly exposed the whole policy regime of the last UPA govt. during the election time, is very amazingly still depending on those very policies; rather it is continuing the same governing trend also especially over price rise, economic management, subsidy continuation and price hike of some infrastructure goods & services.

We all were expecting the NAMO led new government will start some fundamental and long term change in the governance mode of the country, but it seems this government is even not ready to show some new symptoms in its style of governance.

Few days ago, Arun Jaitley delivered a statement that one should be ready to pay the government for the services provided to them; principally it was not a wrong statement. If we do no pay for consumable goods and services considering its cost and inflation, we are playing with the sustainability of a product or its producer. In this context, we all know and it is very much true that there are some government managed goods and services, which are not being appropriately charged to the public as per the present rate of inflation and their  rising cost, but it is also more than true that there lies a huge amount of mismanagement, inappropriate utilization of resources, existence of rampant corruption, leakages and lack of productivity in the several govt. organizations. In order to this , the new government was very much expected to start a longer perspective kind of reform followed by some rational price increase, then it would have called justifiable approach on the part of new government. But this government did not show this gesture and immediately hike the railway fare, this hike move not only gave wrong signal to the supporters of this government, in fact, it was proved to be neither a reformist approach nor a politically legitimate approach, particularly in the context of the upcoming assembly elections in states like Hariyana, Maharashtra, Jharkhand and possibly in Delhi.

    The three factors which are said to be responsible for the defeat of UPA- 2 govt. the price rise, corruption and policy paralysis in the governance, on all these front this government  lacks new vision, so they validated the old policies, rather they delivered the same statement in their defense what UPA people were delivering during their regime.  For the price rise, UPA was also making hoarders responsible for it; the NAMO govt. delivered the same statement, so the question is if that is there, why people replaced UPA with NDA. This NDA government must understand this fact that if hoarders are responsible for the price increase, why don’t they do this all the time and throughout the year, why they do of and on. Many times, prices of essential commodities persist on a reasonable level, why hoarders do not do their act on that occasion; after all we have a defect in our policy, which ultimately provides opportunity to the hoarders to hoard. When there become supply constraints or inadequate supply of some commodities in the market seeing their volume of demand, the problem gets start.

 The question is why government grants this opportunity to the hoarder, this is surely a policy defects, which this new NDA government is either not able to understand or not able to initiate some new policy correction over this.

On the occasion of price increase, generally it is seen government eases imports, restricts export or starts selling items through its authorized outlets or circulating media news in regards to start campaign against hoarders. But the question is, have these kind of measures brought permanent control over the price rise. Obviously reply is in ‘no’.  So, on behalf of the new government, it is very much expected to initiate those kinds of policies which can stabilize the prices forever and never ever give opportunity to the hoarders to hoard. I think it is possible if govt. does three things, first and foremost govt. must fix the minimum remunerative prices to the producers as well as fix up the reasonable maximum retail prices to all essential 32 agriculture items. I think in terms of food grains the difference between minimum and maximum price must be 25 to 30 percent and in terms of vegetables and other perishables the difference between minimum and maximum prices must be 50 to 60 percent, which is right now 50-100 percent in terms of food grains and 100-200 percent in terms of vegetables and perishables.

Second this government must allow its procurement and distribution agencies like FCI, NAFED and other marketing cooperative organizations  to intervene in the open market operation . It means, these agencies would purchase all agro items in the harvesting and plucking season from the producers and farmers and store it in their warehouses and god owns and latter on sell them in the off season period in open market. Third , banning the future trading of all agriculture commodities with immediate effect. If government starts all these 3 measures, prices will have a stabilizing trend.

 These set of measure would ensure regular supply chains in the market. If we do not provide cost plus prices to the farmers, the supply chain in longer period will get affected.  Apart from food inflation which has a more a supply- demand in equilibrium dimension, the problem of general inflation has many more dimension other than demand and supply in equilibrium, which needs to be discussed. General inflation get affected by monetary environment of the country, which is controlled by RBI, it is affected by the fiscal situations of the country, controlled by ministry of finance, it is affected by the tariff policy, controlled by ministry of commerce, it is affected by the external factor, get adjusted and controlled by all above mentioned authorities, it is affected by calamity conditions, controlled through our disaster management system. In these context, for any government, task of controlling inflation is rendered through bunch of policies , having more focus on practicing fiscal disciplines in the governance.

We know, the FRBM act, which was brought to control the fiscal deficit within the target limit in the country, was now followed affectively by the UPA government. UPA’s continuing dependence over populism to win elections in fact brought havoc to the economy.

 UPA govt. first  brought  farm loan waiver schemes in 2008, implemented sixth pay commission ,  initiated non productive MNREGA schemes followed by food security act, these all schemes have had not only having the inflationary content in their preamble of the scheme, rather it had immense potential  of corruption. My latter part of article is going to diagnose that under this ailing economic condition, is this government still ready with policies of UPA Government, means food security , MNREGA and measure to control corruption

I don’t think unless the present government  rethinks and takes decision over  petroleum subsidy, continuation of MNREGA, over pumping food security and starting a new culture in the bureaucracy, it would able to start course correction in dealing with fiscal deficit, corruption and price rise.  I think    UPA took right decision to discard subsdidy over diesel by hiking its rate by 50 paise per liter in every month, now the under recovery has fallen down to merely 3 rupee per liter which was once 17 rupee per liter. But on LPG front UPA took bad and unpopular decision, it should not have created dual pricing system, in stead it should have increase its prices by 200 by limiting maximum cap 12 which was earlier only 6, raised to 9 and then to 12.

There must not be difference of more than 200 rupee between the prices of subsidized and market price of LPG cyllinder. Govt. initiated the small size LPG cylinder very late, I think 5 kg cylinder at the cost of 300 must be made freely available; it will stop public anger as well as black marketing of LPG. On kerosene front govt. should keep continuing subsidized coupon system for the rural areas otherwise it must have diesel parity price in the urban part of the country. A uniform type of policies for all 4 petro items gasoline, diesel, LPG, kerosene must be accompanied with broad tax reform by bring full white paper over it. Govt. must minimize as much as taxes imposed over these. Providing relief to the consumer through tax in place of subsidy is the best policies for any government. It will stop corruption and mishandling of public money.

Talking about MNREGA program, once termed to be a social inclusive program, in fact proved to be inflationary as well created lots of scope for leakages and corruption. If this money being spent over rural infrastructure (physical and social) based on PURA, it would have more meaningful affect over rural economy.  I think NAMO govt. must amend this scheme and make it more meaningful scheme for rural development. Coming over food security act which is consuming more than 1.5 lakh crore annually , it should be stopped by NAMO govt. and in place of this it must start  a nationwide  social security and social insurance scheme, where on elderly people must have  pension of 1000 rupee per month.  I think   present PDS program should be converted in mass lungar program with the help of NGOs and charity organizations. PDS must be stick with calamity condition and for the remote and tribal areas,                                                                                                                                                                                                                                                                                                                                                                                                                               

In regards to tackling corruption from the public life, this NAMO govt. must launch a completely new personnel policy, until unless we have a new office culture, the designing and redesigning of cabinet will not help at all in dealing with public.  Unless we overhaul our bureaucracy, nothing will happen especially on the front of corruption. At last this government  has done one thing different to the earlier government that is     stopping   of Nehru and Gandhi nemesis of almost all program, schemes, institutions etc.,that has now shifted to   people like shyama Prasad Mukherji, Deendayal Upadhyay, jayprakash Narayan,  Pt. Madan Mohan Malviya and Sardar Patel

On the budget

When Arun Jaitley took a long pause in the middle of his budget presentation, it seemed very awkward to the many, because it was never seen before, but at the end of it, it seemed this backache of finance minister which compelled FM for taking pause might have proved backbone of the governance of this NAMO government. During its reign of  almost one and half month, this government , first time got some round of applause, otherwise  the growing price rise with addition of rail fare and diesel-LPG price hike has attracted many opposition to this government.

Anyway the new budget provided some relief to the almost 3 crore income tax payers of the country. The exemption limit  increased by 50 thousand( from 2 lakh to 2.5 lakh), the investment exemption limit increased by  50 thousand( from 1 lakh to 1.5 lakh), the home loan tax exemption increased by 50 Thousand( from 1.5 lakh to 2.0- lakh), the PPF saving limit by 50 thousand( from 1 lakh to 1.5 lakh), all these have given an urgent kind of relief to the tax payers, who were waiting these for a long time, when country was witnessing very high inflation,  salary increase etc.

Second this government has given strong message for keeping the fiscal deficit under the prescribed target. In order to this the present fiscal deficit  would be 4.1 percent and for the upcoming years he has even indicated the deficit would be cut down further to 3 percent level, but the problem is how he would be able to increase tax revenue, because he has told   this fiscal prudent measure would be not achieved through expenditure cut. So he will have to explore the revenue raising measures. He talks about  clearance of all tax disputes which involves around 4 lakh crore and also he has mentioned all bank NPA which involves around 2 lakh crore, if  tax  reform measures are implemented in strong manner, the volume off revenue could be increased.

 We all know the fiscal deficit is greatly aggravated by non plan expenditure like subsidies, defense, pension, interest payment etc. I think barring subsidies, nothing  can be curtailed in the existing circumstances , in the era when petroleum subsidies are on the lower side, the subsidies on fertilizers and food are on alarming side. Though FM has said that he would bring a new Urea policy in time to come, but no one want to bring down food subsidy. In this circumstances to check fiscal deficit under the prescribe limit would be a herculean task.

Many aspirations were tagged with new government and Prime Minister Narendra Modi who had   presented many vision agendas before the nation. FM has tried his level best to incorporate  all those schemes like AIMS, IIT, IIM, Metro, smart cities, urban development, Ganga cleaning and set up of ghats etc. but very amazingly he has provided only token amount of money for these, in reply to this query Mr. Arun Jaitlye says already 3 months have spend and the full modalities of the concerned scheme will come at least within 1.5 to 2 months, then land would be allotted for this, until then financial year would get end so the real budgeting will be done next year only.

Arun Jaitley, new finance minister has no doubt given manufacturing sector, his big focus area, already economic survey tells about setting up of 16  national manufacturing centre in the country. In order to this  about a dozen sea port and a dozen cargo airport, 24X7 electric supply, speedy land clearance have been mentioned in the budget.   Bringing manufacturing sector at the level of 25 percent of the country’s GDP and enabling 10 crore employment generation is a mammoth task.

In the budget we saw many fiscal incentives have bee given to some industries,                                                            the renewable  energy are prime out of them. The power generating companies have got long tax holidays even up till 10 years in the budget.

Most significant point is how this government will frame a new guideline over scheme like  MNREGA, Food security,, the schemes which have aggravated inflation as well as corruption. These two items take around 2 lakh crore worth of money and gives a huge burden over government kitty. If                                                                                                          MNREGA get converted in some Rural infrastructure development plan after clubbing it with PMGSY, AJIVAKA, NREP etc, it will give big boost to the rural economy of the country and on the other side if Food security yojana is replaced by a better social security schemes, it would have a more justification.

Provisions for agriculture credit, infrastructure development have been mentioned in routine manner.

I think this is very early to judge, in the long run this govt. will have to brought many policy and perspective in order to meet out various challenges, the administrative management, e-governance, new personnel policy on all these fronts, if this government does something, it will able open the new face of government, otherwise in the routine framework of governance, budget would be proved simply a routine exercise.

Rail budget      

Start developing Railways to next level and utilizing it as an engine of infrastructure development of the country was one of the NAMO’ main dream during the election. So budget was very much expected on those line, that is why in the rail budget, the government announced the inception of high speed trains along with one bullet train between Ahemdabad to Mumbai. But on the whole this railway budget is telling so many things in a very routine manner, which all railway ministers used to say, like house keeping, RO drinking water, cleanliness etc, increasing the booking of e-tickets, but I think the culture of facilitating railway services in terms of drinking water, lodging, seating, platform spaces etc. is rooted so deep in India and so these are on a very high expectation note from the public side that we forget  one most fundamental thing in the railways, that is availing reservation ticket on demand on anytime and for any route, but this is far from the railway’s achievability. I think when we go to the bus stand or airport, we do not even get seat to sit, we are just being disposed for our traveling, but from the railway our expectations from the railway is so high and deep rooted in last 150 years from colonial period to independence period. 

The one organization, Indian railway, catering the need of almost  125 crore citizens of the country has reached its ceiling point of providing services very before . The railway which has total track length of around 50,000 kilometer has just added 12,000 Kilometer in last 65 years, whereas the Rail passenger has increased by manifold, by almost 5 times, in the same manner the tones goods amount, being carried by railways has increased by more than 10 times. The simple point is we have not expanded Railway as per the demand of the country and the reason because; it is run and nurtured by one and one government only. If we would have separate Rail infrastructure development department under the ministry of railway, this department might have always worked over fund raising to expand railway infrastructure, whether collecting money from the public, from the investors,  from the bankers, from the foreign investors like that. But the railway ministry was left only at the mercy of its political master. This is the reason when a political master of railway provides train for any route, people tell him he is favoring his constituency. Whereas railway is a commercial enterprise, it must be avail on all those places , where people are ready to afford it, pay it, but in regards to railway our perception is different as if rail service is freebies for the public. This is so because there is scarcity and there is in equilibrium in the demand and supply of railway service. So the topmost agenda for railway is to expand it as per the demand of the public and for this if railway invites private players or foreign players, it should be always allowed. In the present budget FDI has been allowed in railway except the operation side, I think this is very late but accurate move. But unless this government bring a broad policy guidelines for the track expansion of the country, just announcing public private participation in pieces meal approach will not help  its causes. I think railway has enough land space to construct one pair extra track on both side of existing track lying all over the country. If we do so country will have extra 1 lakh kilometer extra track which will be sufficient enough to meet out the present and also future needs of the country. Government should outline new rail infrastructure policy like new telecom policy so that substantial investment can be invited for this. I think railway thinkers have done sin firstly by not managing sufficient government funds and secondly by not inviting investors in it through new policy regime. At  present railway minister talk about private investment  not through a broad policy initiative rat her in pieces which have been announced in the budget

We know the expansion of tracks will require a fully modernized traffic control system, because we already have many incidents of accidents in railway, but in the western world the rail traffic control system is fully digitalized, that can be done in India also.

In this budget, railway minister has started so many pilot project, but he could not start a very crucial project that was to start TT less coaches in Indian railway through biometric ticketing system. All railway minister including new railway minister sadanand Gowda keep weeping over fund crunches in the railway organization, but they never talks about the leakages, under productivities, lack of booking counters, the influence of touts and middlemen etc. . in this new budget the new railway minister never mentioned  the mismanagement and corruption in the railway which enables largest number of complains in the railway and bribery reporting in organization like CVC.

I think railway should all out for the corporatization of its all 16 zones, it must be made more revenue consciousness and always avail work for the availing the services as per the demand of passengers.