Budget 2007: An ordinary man's view
Vinit Garg | 07 Mar 2007
An insight into what we plan and what we do
“It is a budget for long term growth.”
No, please do not take this as my personal opinion. I heard a similar view being aired by many corporate honchos. The best and most ironical came from Naresh Malhotra, CCD Director, “We are hit by the increase in commercial property rentals and it will lead to increased prices. This will surely hit our profits. All this when commerce ministry is asking us to double coffee consumption within five years.”
Wait a minute, Mr Naresh! Who is bothered about your profits? Is it you who deserves a profit of 10 per cent more with each union budget, or is it the millions of malnourished children who deserve clean water to drink and enough food to eat? How much would a country be served by offering handful of pleasant gifts to honchos like you for bettering your profits and convincing your top bosses that you are doing an incredible job? Laurels and promotions come your way, and you will be out of this country to head CCD global operations!
How does this idea of growth compare with providing lakhs of students access to education and more teachers or increasing the spending on agriculture, education and health. Sounds like I am forming an opinion here. Well, not really!
Two compelling, yet opposite, thoughts from industry gurus lead to different interpretations of this budget. Following Arindam Chaudhuri’s fine book on India, The Great Indian Dream, this comes as a dream budget in itself. He says, “If middle class is increased, it will create more demand and hence more growth.” It would mean increased spending on key areas such as agriculture, education and health. Industries such as IT, telecom would be taxed more to collect the revenues and Incredible India’s achievements would be shared with “the other half – Pathetic India”.
Perfect it sounds. Does it not? After all, what would a father do when it came to distribution of his resources between his two sons, one an IT engineer (smart, growing, professional, well-placed, progressive) and the other not quite up to it in life (uneducated, unemployed, incompetent and not even able to manage two meals a day). No prizes for guessing it right. The father would allocate the resources to the unsuccessful son and would go so far as to encourage his engineer son to take care of his brother and to share his resources with the poor guy. The finance minister has acted like Big Daddy. Exemplary, isn’t it!
A study of McKinsey Quarterly steers my thoughts in a totally different direction. Some of the facts stated in the report were as follows:
Indian household saving is among the highest. Yet, only 50 per cent of the people put the savings in government led financial institutions.
Corporate sector, a major growth engine of India, gets only 43 per cent of this money, while the rest goes to dilapidated sectors like agriculture, public sector companies and the inefficient education system.
While it is important to address the social sector of the country, history (Brazil economy for example) testifies that putting money in high growth sectors would create more jobs, prosperity and cyclic growth.
Seems as if the ministry of finance has kick-assed the guy who analyzed, compiled and formed this report. Corporate sector has not seen anything aside from assurances or rather taking granted their growth story. Agriculture, public sector and education spending has been increased by almost 30 per cent. A completely social budget with an “all-inclusive” caption line.
Now where do I, an avid fan of all three – McKinsey Quarterly, Arindam Chaudhuri and PC – go from here. Who do I believe ?
Whatever are the views – “Chance missed to transform the economy”, “It’s a good budget for long term growth”, “It is not a bad budget at all”, “There is nothing significant in this budget”, and the best “It’s a kutta-billi budget”, I earnestly believe that growth lies in action and not in planning.
My question is: Why can’t the ministry of finance form a team to track each and every rupee disbursed by the centre to the state ministries and to the local bodies? Why can’t they have a set-up so that the golden quadrilateral project is completed by working 24/7, with workers working in 3 shifts of 8 hour each? Why can’t there be an institution to monitor the irrigation projects going on in the country? Why can’t the ordinary man know what is happening with his money?
Why can’t the government start more B-Schools, if the ISB can set up a successful school in just 4-5 years?
Indian students go abroad to study due to lack of infrastructure and opportunities in India, and they never return. And then we raise the hue and cry of brain drain.
Do the numbers matter to me? Does planning matter to an ordinary person?
No! Results and an aggressive approach to achieve the objectives for tangible benefits do. Of whichever year the budget be – 2008, 2009 or 2050 – as long as an action-oriented approach is adopted, it is going to be the same story. year after year, budget after budget!