The recent railway budget seems to be a continuity of the last many railway budgets, After the wonderful promises of the election that there made, one expected the railway Minister to present a very un-usual budget. But the budget has been very ordinary and nothing new in it.
The comparative figures and data related to Indian inflation were made available in the Lok Sabha by the Finance Minister Arun Jaitley, in reply to a question, on July 18, 2014. The data reveals that the inflation problems of India are its own-making and there is no such trend in other Asian countries. The Indian government for the last 4 years has been blaming international factors for the persistent Indian inflation. This blame seems to be at odds with the factual data.
It Is –unfortunate that a major issue has broken out between the new states of Andhra Pradesh and Telengana over the addition of 7 Mandals which will be affected by submersion by the gigantic Polavaram dam. It is reflection of things is being handled. Instead of bringing states together, one finds that rivers are dividing States and creating enduring animosity between them. This is not healthy for Indian democracy. When parliament passes a law, it should mean that there is wide consensus and that the law will be respected. As soon as the Andhra Pradesh Re=organization Bill was passed, we find that Telengana has said that it is going to court This is not a healthy tradition since every state will then go to court, using the vast financial resources of a state government.
Prior to the elections and the assumption of office by Narendra Modi, there was talk that he was a willing recipient of advice by diverse foreign-based economists.
Prominent among these names were Prof. Jagdish Bhagwati of Columbia and Prof. Arvind Panagariya. The former London School of Economics Professor Lord Meghnad Desai was also viewed as a potential economic adviser. There were many other names too.
There is a consensus that after 45 days Narendra Modi’s prestige has gone up and he is performing better than expected. It is nearly two months since the two new States Telengana and Andhra Pradesh have been formed. It is time to examine how they are faring. One can definitely assess the two Chief Ministers and their interactions with Narendra Modi and his government and what Delhi thinks of them.
Within a day, we will know whether Finance Minister Arun Jaitley is any different from Congress Finance Minister. I would like to warn Narendra Modi that he does not have 5 years time. Many advisers say that for two years there must be harsh measures and then after that, government can show progress and give people benefits.
1. The real world does not work like that. People want relief from Day 1. If government takes harsh measures, the political goodwill of Modi will be lost and his government will be in trouble. Arun Jaitley cannot afford bad news.He might be under illusions that people are ready to suffer. Just a hike of 15% in railway fares brought so much ill-will for the BJP government. Finance Minister Jaitley must understand that any tinkering against the common man’s interest will not be forgiven. The flood of ill-will will wash away the entire political capital of Narendra Modi.
2. If Arun Jaitley listens only to business and industry, then again the government will be in trouble. The country needs a happy business sector. But the Finance Minister and Prime Minister must remember that business only thinks of itself. Their only concern is profits and stock market. Government must be cautious and listen. But do not follow business. When Telecom Scam was going on, no businessmen exposed it. The entire business community was aware that there was mighty corruption in the telecom sector. No one blew the whistle. Where were the upright people in Indian industry?
3. The election mandate was for Modi against the Congress. It was not a mandate where people are ready to suffer. Economic reforms are painful. Government needs heavyweights. Except Jaitely and Rajnath Singh, there are no political heavyweights. Reforms need heavyweights. Prime Minister Narisimha Rao had 12 Ex- Chief Ministers in his government in 1991-96. That is why he was able to weather the pain from economic reforms, the Assam trouble and most important the Khalistani threat to India.
The BJP government has to tread very carefully on water. It has very little time. Its victory is not for pain, but immediate relief.
There are disturbing reports that the BJP Government is hanging on to major schemes and policies of the last UPA Government. Of course, the same government officials continue and naturally, they convince the new government that the policies wee excellent and that only it's implementation was faulty.
The new government is also usually bereft of good ideas. In the beginning, any new government gets excited and acts as if they have a big truck of new ideas. Usually governments get defeated due to their own follies. New governments ,once in office, find they are bankrupt of ideas. Their MPs are great politicians ,but they make poor Ministers.
The Congress government of Manmohan Singh was totally obsessed with the LPG cylinders and its' price. The UPA government created a sentiment in the country that the economy was in shambles only due to the fact that the LPG cylinders were subsidized. The UPA Government fashioned a huge fiscal deficit, whose causes were elsewhere. But the government only targeted LPG cylinders.
There are a lot of expectations in India that the coming Budget on July 10, 2014 will somehow tackle all the serious issues in the Indian economy. The serious issues are inflation, stagnation in the economy, the fiscal deficit and the wide gap between exports and imports. These four issues are also related to each other.
There is talk that the Land acquisition Act of 2013 is going to be amended as state governments and industry eel that the law is too strict and land availability will become severe hindrance for industry purposes .In my opinion, the new law of 2013 is actually anti-farmer.
Dr. Pentapati Pullarao is an Economist, Columnist and Public Affairs Activist and has contributed over 650+ articles to periodicals and newspapers in the last 15 years. Pentapati Pullarao is also the President of Forum on Social & Human Rights and a Life Member of Indian Society for International Law, New Delhi. Dr. Pentapati Pullarao had been quite instrumental in taking up the cause of displaced people and actively represented to government on the need to amend Land Acquisition Act of 1984.