Last week was the Budget week. I am normally not very enthusiastic about such events but now with Mck and AID and a general desire to have an opinion about everything made me check the Budget as it was being told. I had nothing to benchmark this budget with....xcept the dream budgets of 91 and 97. So here I go.
Firstly i believe that the 91 reforms have been overhyped. Ofcourse, the reforms were revolutionary, but thats it!! They were revolutionary. After having seen Commanding Heights, I am convinced that India was in dire need of those reforms, from the power to pass on from Central planning to the markets. But its not that MAnmohan Singh thought of those ideas by himslf and created a new theory. He just did something which was very practical, relevant, hihgly common-sensical and a dire need of the hour.
Similarly, 97 was the time when the world, and not only India, was shining. The IT sector had showed its prowess and internet had just come to India. There was no better time for India to shine than the late 90s and shine it did!! The sparkles had to come from Industry and Services, and he did just that.........
Ever since 97, when PC made a famous remark in the Parliament that the budget was his ‘baby’ budget...the politicians, the economists, India Inc, and especially the media expects him to produce more babies each year. And PC has failed, failed miserably to live up to hteir expectations.
But he hasn't failed on one front – economic growth. Thanks to his boost to the industry and the services, India has grown phenomenally over the past 4 years – growing to be what we now see as a global superpower.
What lagged behind amidst all this hype of India shining was the good old farming sector. I remember reading in school that more than 67% of India’s population is dependent on agriculture. That figure is down to late 20s now. What happened ?? Well, what has happened is that young sons of farmers refused to work in the fields and went to nearby urban towns where they could find jobs in the hugely growing consumerist culture, which India’s middle class has come to represent. Both the farmers and the middle class were happy, it was a nice balance........well, till the big “I”came into the picture.
Inflation is a destroyer of thousands of economies. Zimbabwe is currently reeling under 1300% annual inflation as the prices of even bread is increasing by the hour. 6% inflation for whose growth rate is 8% meant that the nation is growing at 2% only. In case of the middle class, dependent largely on Services and the Industry, the growth is almost 15-20%. In their case too, this comes down to around 10-14%.
We tend to forget that India is way too big and way too complicated to be divided into merely the farmers and the middle class. 25% of India is below the poverty line. 40% of India is middle class. Now, such poor people are not farmers..........they are rickshaw pullers, masons, tribals, labourers, or worse....jobless and homeless!! For years, I have seen R.K.Laxman representing this aspect of India in his cartoons in TOI every year.
There cannot be a successful India , and there cannot be a GREAT India if this statistic is not lowered.
I think PC has delivered a wonderful budget this time. It is following a simple policy, “Tax the rich, and pay the poor”. He is not only catering to the needs of th 40% who are growing, but th 40% whose condition hasn’t changed much for decades – who, in fact, are the victims of an extremely consumerist developing India.
Economists, politicians, media – all feel that the great Indian rise is a result of the resilience present in the Indian population. There have been myraids of articles about how India has grown not due to the state, but despite the state, about how India would have progressed at 9%, even without Manmohan Singh and PC, about how the services sector has grown at > 15% and the farming has been stuck to less than 5%. Then why do we think that India Inc will suffer if PC decides to make an ‘aam aadmi budget’, why can’t we just stand up and support a Finance Minister who has behaved prudently and is trying to build India, the whole India.
India is not just a clubbing arena for the rich of Delhi, not just a tourist paradise for the revellers in Goa, not just the land of the Bhel-puri and Tandoori Chicken........India is home to the most diverse population in the world. Let us all build this India, together!!
