Working for incredible India
The pro-people budget has generated appreciation for Pranab Mukherjee. But it is not benevolence, rather simply a matter of right for the common people
The annual budget announcement of the Indian central government by the finance minister is perhaps one of the most important annual events for the country. The budget is one time in the year when the government comes before the people to give an account of the country’s resources and announces its financial roadmap for the coming year. The budget, thus, is a reflection of its performances and also the precursor to its intentions. Generally, much of the discussions about the budget revolve around the second aspect, insomuch that the budget is often treated as the policy document of the government’s economic outlook.
A lot is being written about the focus on the aam admi in this year’s budget. The central government is responsible for the entire population of the country and hence taking measures to address the problems of the common people are its responsibility and not benevolence on its part. Moreover, addressing these issues is important not only for the poor people but the welfare of every citizen in this country, be it rich or poor.
For example, because of the financial crisis last year, the growth of the manufacturing sector (calculated at constant prices) fell from 8.2 per cent in 2007-08 to 2.4 per cent in 2008-09. While this figure is shocking and has attracted lot of attention, what many miss is the fact that agriculture, forestry and fishing sector growth too has fallen over the same period from 4.9 per cent to 1.6 per cent (all figures are from the Economic Survey, 2008-09). It is not just about the magnitudes of the fall. Agricultural sector provides employment and sustenance to the largest section of the population. A meager growth rate of 1.6 per cent not only means hardship for farmers but is also a major threat for the overall economy. Food products are the most basic of any country’s demands. Our country’s current population growth rate is around 1.6 per cent (as per CIA world Factbook, 2008). This means that last year we barely managed to have enough food grains to meet the demand. Already this year the truant monsoon has set off concerns of drought and subsequent fall in productions. In a country with one of the largest population, one cannot think of economic development if the basic needs are dependant on the vagaries of nature. The increase of allocation under the Accelerated Irrigation Benefit Programme (AIBP) by 75 per cent is thus a much needed step. Unfortunately, the target for agricultural credit flow for 2009-10 is set at Rs 3,25,000 which is just 13.24 per cent higher than last years figures of Rs 2,87,000 and is in fact grossly inadequate given the magnitude of the crisis.
The measures to improve infrastructure are other important step taken by the government. The increase of 23 per cent for the National Highways Development Programme (NHDP) and 87 per cent for JNNURM are investments in sectors which are much needed. All such expenditures being undertaken by the government are thus necessary steps for the betterment of all. The investment in infrastructure is going to give employment to some poor labourers, generate a demand for construction commodities, which in turn will give employment to
several workers while at the end of the day provide you and me with better amenities. What goes around comes around; and often with a dividend. Economists call it the ‘multiplier effect’.
At a time when the private sector is reeling under the aftermath of the global crisis, the state must step up its investments. The role of the government is not just to provide support or incentives to the private enterprises, but to take a holistic view of the entire economy, and where the problems are imminent, it must take proactive steps.