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Will Modi Government’s Forthcoming Budget End Up As Mere Price Pushing Exercise ?

| by N.S.Venkataraman

( June 18, 2014, Chennai, Sri Lanka Guardian) Mr. Narendra Modi has cautioned that India will have to face tough measures that would be initiated by his government in the coming days to ensure economic growth. He has virtually said that hard times are ahead for the citizens. The common men wonder as to what can be the more hard time than the present one.

Following Mr. Modi’s observation, now rumours are afloat that railway fare would be increased and price of diesel , petrol and other fuel would go up. Obviously, these and similar measures will lead to further cost push inflation and result in price spiralling. Consequently, it would lead to demand for higher wages and the counter productive cycle would continue as it has been the case so far.

These are precisely the practices that have been taking place in India during the previous UPA governance and how w ill Mr. Modi’s government be different from this ?

It is surprising that Mr. Narendra Modi and his team do not appear to have realised that increasing the taxes, price of services and commodities to boost the income of the government would not provide solutions for the country’s economic and industrial stagnation. On the other hand, what is needed is to apply a freeze on the all sorts of tax measures and stop increase in the prices of fuel , fares etc, to minimise economic woes of the people and boost their morale to participate in the exercise for national growth.

What is really necessary is for the government to drastically cut down its wasteful government expenditures, improve efficiency and productivity in all possible ways and give up the schemes to the extent possible that amount to extending freebies .

Certainly, the government can promote steadily industrial and economic progress by creating the right climate for growth and ruthlessly putting down corruption in the government machinery at all levels and unearthing the black money and bringing out the hoarded commodities.

There is parallel economy in the country today with several crores of rupees of black money in circulation . A competent government with a determined outlook and programme should certainly be able to bring out the black money , that will have far reaching and positive implications on the health of the national economy. This would inevitably result in increased income for the government and make it unnecessary to increase taxes further. It would also bring down the price of real estates and essential commodities, with dramatic effect on the national psyche.

It is well known that overall efficiency in the country is below par and even scientific establishments and research and development laboratories are functioning with the lethargic attitude and without any accountability. Mr. Narendra Modi should be able to implement strong measures to bring all round efficiency in the country by recognising the individuals and organisations functioning with merit and weeding out those in positions of power who can not meet the national expectations and the needs.

People have appreciated Mr. Narendra Modi’s stress on providing huge opportunities to the people for skill acquisition and creating employment prospects at the small and medium scale level in a big way. The investment are needed for this task and there is enough money in the country in private hands to make such investments , which can be supplemented by investments from overseas sources too.

Let not Narendra Modi’s government move in the beaten track of thinking that increasing government income by imposing taxes and fare increase is the need to stabilise the economy. Moving in such direction would make Modi’s government no different from others and will leave the common men extremely disappointed and frustrated.

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