22 February 2010

AAM ADMI AND HIS 2010 BUDGET


Come February, the buzzword is ‘budget’. Even if the common man is least bothered, the English media keeps hyping it up. They want people to send feelers to our Finance Minister. It looks as if though u ask god a wish and he immediately grant the same to u. The aam admi very well knows that he is always the soft target and no one is really interested on him. The main beneficiaries are going to be the capitalists, hoarders, stock brokers and middle men. I need not mention about the typical Indian politician hiding in all the roles at various levels.

Reckless spending on Social sector:

Ever since the UPA took over, it has been spending recklessly on the social sector. I am not against spending on social sector. I too support the judicious spending on social sector for inclusive growth. But i underline the word reckless. The pet project of the UPA has been the Mahatma Gandhi Rural Employment Guarantee Scheme, where rural men and women are employed through the panchayat president or politically linked state government official. Immaterial to mention that both these men are corrupt and take their part before the salary is distributed. The work routine of the rural folk is something like this. Come at 10 am. Do some work till 1 pm. Take rest till 2.30 pm .Work for another one more hour and secure by 4pm. The work they do is to take mud from one side of the road/pond and put it on the other side. The next day they do the reverse. Take the same mud and put it in the original location.

A hopeless job where they do anything worth. They do not create any rural infrastructure and they are paid +/- Rs 100. The positive side has been the fact that their income has increased and they no more depend on their regular farm employees for agricultural work. The men now happily spend the income for their own social commitments basically drinking alcohol. One can find the mushrooming of state owned alcohol shops all over the country side these days.

Rob Peter to pay Paul:

As this famous English proverb goes, the union government is conveniently robbing the urban middle class and upper class and paying the so called poor who have their own house, tv sets and high end mobile phones. The real ‘platform’ dwelling poor are never in the rolls of any government schemes. The IT/Corporate/Govt employees continue to remain the soft target. Media keeps highlighting the high salaries of corporate employees and the sixth pay commission for government employees. They forget the fact that these same people now spend so much on food, water, school fees, transportation and not to mention the various taxes which they pay regularly without fail. Half of the salary goes for these basic needs. The middle class now hardly have anything left to save for their future. The real estate mafia has increased the prices so much that owning a house remains a dream for our middle class.

Such is the mismanagement of policy by the UPA government, one wonders how they came back to power?. The cricket savvy union agriculture minister has hardly any time to spend on his constitutional portfolio. He and the RBI governor give us tentative dates where the inflation will come down. Now the date given by them is july 2010. The high prices have been thrashing us almost for a year now. The policy managers sitting in Air conditioned rooms can only give us these dates and nothing more.

The inflation always goes down but the prices never. Classic example has been the prices of all varieties of dal which have often reached 3 digits. I suppose the politicians would have realised this if they had ever gone for marketing to purchase their household items.

Where is the fault line?

One need not be a distinguished or extinguished economist to find out the reasons. The following are
1. Online trading of all essential food items.
2. Declining agricultural productivity
3. Apathy of state governments and its officials
4. Gross policy mismanagement by the union government

Let us see the reasons in detail.

The reason for permitting online trading is part of our liberalisation process. As usual liberalisation always favours the capitalists and middle men. It benefits the middle class only at times. How do u justify the fact that the prices of capital and non essential goods(like mobile phones, bikes and cars) are going south and the prices of essential items(food and water) are going up.

The agriculture sector has been the worst hit in the last decade. Failure of monsoon is just one natural reason, but the real culprit has been the agriculture ministry. The ill conceived rural employment scheme has increased the cost of labour manifold making agriculture economically unviable. The farmers are not doing any social service in agriculture. They too need marginal profit. Apart from that the prices of urea, transportation and other agri specific inputs just force the farmer to abandon any plans for tilling his land.

When agri inputs go down for natural or unnatural reasons, it provides an opportunity for the politicians to make quick profits through food imports. Just imagine the wheat import fiasco which our agriculture ministry did few months ago. They exported high quality wheat at low price. Then after few months they imported low quality wheat on high price. We don’t have a agency to provide scientific inputs to our farmers. Even if we have one, we don’t evince keen interest to take it to the farmer in spite of our technological advancements.

Another factor is the apathy of our state governments. Barring a few, most of our state governments are incapable of doing any justification for the mandate which they have got. The southern states are slightly better in this respect. They have well routed public distribution system which at least takes little of the salt in our wound.

Unless and until the Congress and UPA are shown the door in the coming elections, the government will not get into a serious mood in this issue.
After all the country and our people deserve better governance.

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