Many on the ruling Government, would like to forget the nightmare of "India Shinning" marketing campaign . It is interesting to know, that you would, still like to remember the same , that how the idea of "India Shining" marketing message, symbolizing the development work in first "NDA government" backfired, and did not go well, with common man. They replied back in an unforgiving way , expressing there rage in ballot box.
I would not definitely not like the marketing message of "Acche Din" encounter such fortune.
The question of a budget, is not limited to spending between "Vix" and "Melody". That is too simplistic version , and yet out of the context of economic thinking required for budgetary policies. The question here is how do you grow that "1 paise" earning ? And how do we spend that "1 paise", which is earned in a way , that you get maximum return .
For that we have to understand where does this "1 paise" comes , we earn comes from . Well, majority comes from the service sector and agricultural sectors . With the present GDP of 4.7% , the service sector contributes 5.8% and the agricultural sector contributes 4.7% which is up from 1.4% last year , but with monsoon predicted to be low , the agricultural sector growth would be low. We have the manufacturing sector remaining which is showing negative growth of -0.7%. From an economic viewpoint , the manufacturing is the base of service industry . Otherwise, whom do these service business which are coming out will serve ? Presently most of service industry growth comes from export . These way , like the IT and ITES and other service industries could not build strong products , as there is lack of domestic market, for experimenting with this products and have the product maturity curve. These way in future , we will also starting loosing the edge of India's economy, which is based on Service sector. There is a need of building up strong domestic market , which cannot be build without the growth of manufacturing sector, as it is the key to economic activity.
At the same time , if the Government wants to reduce the subsidy, as a part of controlling the spending , it has to first make sure that more people are in the earning curve, and doing economic activity , that they have the ability to buy the products needed for there daily life , even when they are expensive.
So , all these points out that the manufacturing sector cannot be left out for negative growth.Because these segments employs many semi skilled labor, and also could generate employment for unemployed certificate holders .
These people are the group who requires the subsidy . You can take away both from a man. You can't take away the job from which they can make the ability to pay, and at the same time take away the subsidy, that he cannot at least buy the goods he requires for his daily living.
So when you are talking tough , and taking out subsides from sugar , fuel and rail fare and plans to do that more. Whom are you hitting out ? It is these large group of semi skilled labors , who have already gone jobless , due to the negative growth of manufacturing sector ,and now they are surviving out of there savings , and then you are making there life more harder by curtailing the subsidies.
So, if you have to curtail the subsidy , you have to give them jobs that they can handle the pressure and able to survive . For creating those jobs , you have to bring the manufacturing sector in place, and that requires wise investments on infrastructure and power. If the infrastructure and power, is brought in right place , we have a very good talent pool of semi skilled labor which can be utilized . We cannot deny , Nuclear power is a very good alternative, without much environmental degradation for meeting the growing needs of power.
For that , Government need to raise investment from the service sector which is performing good, and there are many people who can afford to pay, in the form of bonds that gives higher benefits then other financial instruments. Even householders can be financiers to infrastructure projects , if the norms of investment in insurance and other financial instrument becomes more easy. Government can raise money in innovative ways , and the outcry that past Government has not kept anything is another political motivated message which we should learn to ignore.
Just to check the facts on these, at 2004-2005 the GDP was 7.0% and at 2005-2006 it was 9.5% , at 2006-2007 was 9.6% and when the World Economic Crisis broke out , it was 9.3% . When the World Economic crisis went into worse form India's GDP remained 6.7% 2008-2009 , 8.6% in 2009-10, 8.9% in 2010-11,and 6.7% in 2011-12. So your claim everything done by past NDA Gov., is a mere fiction and not based on facts , and all the time the past Government was blaming to World Economic Crisis is also not true. As in the period of World's worst financial crisis the India's GDP didn't go drastically down.
If Government can raise the investment and make the manufacturing sector grows , it brings growth in service sector also , as now India will have much wanted domestic market, where they can test there products and build world class service products . Until unless , we are in a position to build world class service products , like IT companies in US does outsourcing the non core process , we will always work as an Outsourcing vendor, exporting service and slowly destroy our future as Infosys, did for themselves with the lack of world class service products . Many other companies are in that curve, and they will realize it only when there revenue drops , which is again the last sign of such disorder.
As you can see , much of the logic you delivered in the last mail is based on fictions , and your own perceptions and not out of facts . Well you are free to express those , as long as the present Government doesn't put any bar, on the constitutional right of Indian citizen on "Freedom of Expression" .
The expression of your simplistic economic thinking should be reserved for your students J .They might require such vocal and rhetoric economic thinking tonic , at post budget interaction, to handle the inflation pressure , and feel positive about there economic state,getting back there focus on studies.
As of now , getting back on the citizen perspective without getting further distracted , let me remind points of the Citizen wishlist, which you are not in agreement on Infrastructure and Skills Education , has been echoed also, by our former CM and present PM's commentary on Budget 2013 in Economic Times dated 1st March , 2013 under the sub headings "Find Cash for Infra" and "Skill them young".
Regards,
Sri Joydip
Managing Trustee & Founder,
Sri Joydip Ashram
http://www.srijoydipashram.org
https://www.youtube.com/watch?v=WyWx0_djt2c
And a Non Business Participant in United Nations Global Compact working on
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Let me try to make it more clear.
If one earns....one spends.
If one earns a paisa...one cannot spend a rupee.
We need to see the government earning ...before we see its spending.
Why did the previous government stall projects? The answer is simple. With the elections on horizon all the schemes which get vote where engaged in.
Now let's say you have a rupee to spend and you have to choose between buying aa vicks for cough ..or a. Melody for a child.
You can only buy one..not both...!
Infrastructure projects...cool..do we have the money to pay?
Employement in manufacturing sector..even cooler....but how does one achieve that with a negative growth of the manufacturing sector?
No one thinks of passing the buck. If the previous government had won back to power they would have been doing the same thing.
Till their last day in power they kept blaming the world economy for all the economic woes.in the last 2-3 years of their rule..they announced all kinds of soaps.. where did the money come from to fund them.
Those soaps are also necessary now..and no government can role them back. ..at least won't have the courage too.
Till the industrial output increases and the government earning increases by its push. The common man will have to bear many burdens.If the centre had so much money ..the former PM wouldn't have commented in odisa ..that money doesn't grow on trees.
The ways in which 2G and coal blocks where handled..not only led to loss of valuable money to ex-chequre..but also led to poor development of those coal blocks.
So much for power generation. The previous government made such a hulla ..bulla over signing of the nuclear deal.
I am sure many know here what is the gestation period for setting up a nuclear power plant? Who are we fooling?
the first five years they seemed to be enjoying the work done by previous NDA govt. When in the second 5 year term they finally began working.
They left everything in negative.
Yes this discussion is for the aam adami.
The aam adami kept its mouth shut for too long. And was guilty of voting into power a group of men and women with a common financial interest.There is so much more I can say. But I think we all know what we are guilty off.
Let's hope the finance minister can come up with a reasonably good budget....one that brings some ray of hope....in this bleak economic enviornment ...Where the consumtion is increasing exponentially at speed greater then the output.
Thanks and regards
Dr. Padma misra
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