Replace Good Intentions With Bold Decision

kamal-morarkaNovember 26 marked the completion of 6 months of the Narendra Modi Government. Let us see what has happened in the 6 months. One thing is for sure — that the national sentiment changed drastically, from one of despondency to one of enthusiasm. The common man is enthused that we are on the threshold of major changes. The second thing that has happened is that the Prime Minister announced a lot of measures which will be unusual but with which you can have no quarrel. First is, toilets should be made throughout the country, open defecation should be stopped. Nobody can complain. Second is, Swachta Abhiyan, all the garbage should be properly dealt with. Now these are things which are age old and have been neglected also and therefore nobody will quarrel with the Prime Minister when he announces it as a national project or a scheme. The problem comes in implementation: how will you provide toilets to every village or every place and if you want to provide there has to be a standard design. If there are toilets that you make for the sake of making and they are unusable then open defecation will still take place. So it is not yet well thought out. Is there a mission, is there a body, is there an authority which will give the direction as to how this will be implemented? And what about the funding? Either MP-MLA funds should be used for this or the Government should give a separate grant for this or corporates should be told to earmark a certain amount to do this. But nothing has happened. Individual cases, individual initiatives are there but not on a national scale. Similarly for cleanliness, it is even more difficult. How will you implement? Even the garbage being cleaned in these photo opportunities by leaders, all the garbage is mixed up. In the world they will look at it with horror: bio-degradable, glass, metal all is mixed into one and thrown into a polythene bag. Then what happens to that, the problem is not solved. We have to go to the modern method of having separate garbage bins for bio-degradable, glass and metal, chemical etc., whatever is there, by modern scientific methods. Again, who is going to fund it? Even rich Municipal Corporations like the Mumbai Municipal Corporation — they cannot talk of shortage of money, there is plenty of money. But even in Mumbai garbage is in an awful state, people just throw litter anywhere, there are not enough dustbins. What is working in Mumbai is contract cleaning. Wherever the Municipal man is cleaning or not cleaning they have contracted it out to contractors, and those places are getting cleaned because the contractor will get money only if the street is cleaned. Now whether this is the right model for the whole country, I don’t know. Naturally, Government employees will be against this because you are contracting it to outsiders, but the fact remains that cities which have a lot of money like Delhi, Mumbai, Chennai, Kolkata the streets can be cleaned only by corporations in an organised way, either by their employees or by contracting. Similarly, in the smaller towns there are Municipal Councils or Municipalities or Panchayats, they have to be authorised. Otherwise this will remain a good intention of the Prime Minister but will not amount to anything.
Other than this in 6 months the Prime Minister has made great strides in improving relations with our neighbours and with China, America and Australia, Japan, which is very good. Relations with these countries were never bad, but giving a new fillip to it is a welcome thing. Of course it has to be understood in world politics that every country will look after its own interest, and one should not feel bad about that. After all, America looks at India as a big market. You must safeguard your own self but the initiative of the Prime Minister to improve relations, bi-lateral relations with all countries is a welcome one. This is on the plus side of the last 6 months. What remains to be done is the direction of the economic policy. We do not know. No major changes were made in the last Budget, but the Finance Minister has now promised that in the next Budget he is going to do what he calls second generation reforms. What exactly he means we don’t know.
Also any change, let’s take the legal system, it needs a major overhaul. Litigation takes years and years and the poor man and the middle class man now will stop going to courts, he can’t afford it. What is going to happen? Whoever is in the Law Ministry, is he applying his mind? This Government the way it is with the proactive approach, should engage with the Chief Justice of India that lets carry out some major reforms, let’s give some relief to the common man, but I have not heard of any move on that front. Similarly, on the financial front, this is the party whose main base is the middle class and small traders and merchants and shopkeepers: no relief has been given to them either by way of sales tax or way of inspector raj or anything. I have talked to small traders, no change has come. Good intentions have come, they also feel good, they feel reassured the Modi Government has come, but nothing has happened on the ground. All this needs to be addressed. Whether the Finance Minister wants to do it or not, we don’t know. He has got more elbow room than the previous Finance Minister because world oil prices have come down drastically. So that gives him breathing space, import bill is reduced, current account deficit is reduced, he has got some money. Similarly, the food stocks are quite good, so the inflation can come down by releasing food stocks. So this Finance Minister has elbow room to do a lot of things which the previous Government could not do. How far he wants to do it, we have to wait and watch.
Similarly, an intriguing part of this Government is why did they not abolish retrospective tax within 24 hours of getting sworn in? It is a measure on which there is unanimous opinion, that it should be abolished. Even this Finance Minister made a committee to examine those cases, which is a very timid decision. If before this Budget nothing comes out, he should abolish it all together. That will give tremendous confidence to the investor community either in India or abroad that India is a fair country to do business with. If you go on changing the position of the goalpost no game can go on, nobody will be assured. India should look like a civilised country which keeps its promises. This Finance Minister is a very intelligent man, he understands everything, he must be having his own difficulties or problems in implementing this. But before the next Budget his mind should be clear and he should take some bold decisions. I am reminded of 1985, when Rajiv Gandhi appointed Mr. V.P. Singh as Finance Minister. And Mr. V.P. Singh as Finance Minister understood immediately that the tax rates prevailing are so high that everyone evades taxes or avoids taxes. He called the Finance Secretary Bimal Jalan, if I am not mistaken, and asked him that we should reduce. Bimal like all bureaucrats said then we will lose revenue and like all political persons V.P. Singh gave a smile and said if nobody is paying taxes at this rate how will you lose revenue, and he took the bold decision of reducing taxes, and that trend has been going on since 1985. And India’s revenue position is in a much-much more healthy position than prior to 1985. And that is because at 30 per cent individual taxation today, lot of people pay taxes. Raghuram Rajan of the Reserve Bank has also said that we should go towards reducing taxes so that people can pay. I am now talking not about corporate sector, I am talking about individuals, especially those who are salaried individual earners. In my opinion they should be not taxed at all, but at least they should not be taxed more than 10 per cent instead of which we are charging 30 per cent. You charge 30 per cent on the higher ones but reduce the tax, there will be more money in their hands, they will put it in the national economy, either in the fixed deposit in the bank or in the stock market or in some way. It will definitely give a boost to the economy, but these measures are to be taken personally by the Prime Minister and the Finance Minister. Only they can take this call.


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