High Hopes From Nirmala

BY APURVA RAI

I would once again like to thank the Finance Ministry for inviting suggestions on Budget-making exercise.

I am neither an economist nor an expert on finances but still have got lot of feelings and experiences which get reflected in this write-up where I wish to put up my thoughts about the state of our economy and the shape of things to come by.

My views are expressed in points on various issues so that they are easily comprehensible. It would not be suitable to put ideas in essay format as it needs lots of time to read and follow.

I have also put up links of my previous Blogs on Budget-making when Mr Arun Jaitley was the finance minister.

UNEMPLOYMENT

The issue of employment is crucial and the biggest challenge for the ruling government. However, it is not a commodity that can be produced and offered to the people instantly. To meet the challenge of unemployment I suggest:

a) Large Industries: There are lots of industries in the country but a large number of people get absorbed only when you have big sectors like steel, cement, automobiles etc.

Aviation Sector: We in India do not have aircraft manufacturing units. There should be special allocation in the Budget so that smaller planes, to start with, or choppers are manufactured within the country. This will bring revolution in the aviation sector besides generating huge direct or indirect employment. Remember, what happened after the launch of Maruti-Suzuki alliance in the auto sector. Today automobile industry is one of the biggest job-oriented industry.

Shipping Sector: Just like aviation sector shipping industry is also highly job oriented which goes on to give huge direct and indirect employment. To start with the government can give special funds for the manufacture of small/ medium motorboats, small ships and small cruise. Once this industry comes up and establishes itself with the help and support of the government not only shall the nation make progress but an export would earn handsome foreign exchange.

The biggest catch is that the prime minister is himself keen in starting waterways in the country. Secondly, India is surrounded by water on three sides and lots of countries around have huge demand for motorboats/ ships/ cruises and similar other water transport.

b) Farming/ Agriculture: India is basically an agrarian country but this sector has been grossly neglected, used by politicians for their selfish reasons and mired in unnecessary politics. The issue of poor farmers is raised during each election with the objective of grabbing power and once the power is in hand the government makes every effort to keep the candle burning by ways of numerous welfare schemes and financial helps. Alas, the farmer of India continues to remain poor, lives in pathetic conditions with near absent comforts of life and is debt ridden. Nothing has been honestly done to help farmers achieve higher yields per hectare, raise their standards of living, stop youngsters from abandoning farming and moving to cities as labourers or . I hope Ms Nirmala Sitharaman would address the issue keenly and show how much can be achieved in this sector if efforts are made genuinely.

Food Packaging Industry: Special provisions to food packaging industry are crucial to enhance the income of farmers, remove middlemen who buy agro-products at throwaway price, hoard them and later sell at inflated rates. 

The Budget of Ms Sitharaman should allow food industries to buy agro products directly from farmers and package them to be sold to consumers. If a company is manufacturing ketchup it should be allowed to buy tomatoes directly from the farmers. Secondly, the agro companies should be asked to set up plants in such areas where the products they need are cultivated. For example, if a company is packaging coconut water it should have plants in coastal areas only or in such places where coconut is grown in abundance. This will reduce cost of transportation and help farmers in approaching the industry conveniently.

Business Houses to Invest in Farms: There are a lot of traders, business houses, corporates who are rich or have lots of surplus funds. This can be diverted to the agriculture sector. Through the Budget the finance minister can allow these houses to negotiate with the Panchayats and push money on behalf of farmers. Thus more of rural youth will find jobs in agriculture sector in villages itself and one can easily stop migration of population to urban areas.

However, the modalities in this method need to be worked out. But if there is an honest method then the business houses can be given special rebates through budgetary provisions to go to the rural areas.

(NOTE: This is just a pointer as the issue needs to be discussed at length for more clarity.

In nut shell, the finance minister has to make sure that there is perfect harmony between agriculture/ industry and commercial railway. This is the only method that we can help uplift the status of farmers.

c) Govt Jobs & Govt Work Timings: The title might sound strange and weird but have you ever thought that our government offices work for nine hours officially and remain closed for remaining 15 hours! Yes, that’s the truth. Now, may I suggest that let the Budget talk of more intake in government jobs as there is plan to increase government work timings, i.e. practically working in two shifts. If you mull over two shifts 8 to 5 and 1 to 10 then we will need greater number of staff without much increase in infrastructure. The government can have higher intake in all its vacancies and this will go to on to address the problem of unemployment to some extent.

Benefits: There are some benefits of working in two shifts— first is that it will do away with traffic jams during working hours and thus save peoples’ time that they spend in travelling to offices. Second is that they will need less of half day or full day leaves as the shift will give them time and space to accomplish their small tasks before or after shifts.

Why: The idea of two shifts comes as we all know that the offices open up before the staff comes and remain open much after the majority staff has left. In between the lights are on, fans and air conditioners are working. The bills are paid but nobody bothers because it is sarkari kharcha. Then why not make better use of resources!

AGRICULTURE/ FARMER ISSUE/ RURAL INDIA

We have had a lot about rural sector, farmer issues and agriculture production. There has been a lot of politics over problems rekated to farmers who continue to live in poverty and debts despite governments announcing welfare schemes for them. Today the youth would prefer to work as a labourer in a city than harvesting a field in the village. The farmers of our country do not have access to even basic necessities of life. The reality has not changed in the past seven decades since India gained Independence and we all know it. So is this not the time to uplift the rural India and make it pride of nation? 

Investments in Fields: This is the issue which has led to the poverty and killings of farmers of our country. I seriously think that someone has to take the lead and come up with revolutionary and out of the box thinking to alleviate farmers out of their current pathetic condition. Hope the new finance minister will show prowess in this direction and make budgetary announcements that are reformative and beneficial. 

 

I find it surprising and ironical that a poor farmer takes loans to harvest in the fields so the yields are relished by the rich in their air conditioned dining rooms or plush restaurants in urban areas. Is it not disgusting and invites some food for thought?

I think that time has come when one should involve the rich in agriculture production or harvesting process. For this the finance minister should allow the business houses, industries, traders or businessmen to come forward and invest in the villages of India in collaboration with the farmers who have Gram Panchayats as their supreme bodies. For this the industries can be granted special exemptions or other financial benefits in order to divert their surplus funds to the rural sector.

The companies that make investments in villages can be granted ‘extra tax benefits’. However, they shall be just investor and would not become land owners. Even the farmers shall be leasing their farmlands to these business houses for reaping purposes only. These houses can hold discussions with Panchayats, sign agreements and may combine several villages or farming and bring in latest instruments or modern methods of cultivation.

This scheme has lots of benefits like the farmer does not have to take loans for farming, gets all facilities like seeds, fertilizers, distribution of produce and the methods of cultivation gets immensely modernized even in the remotest part of country. Yes, you get it right as the farmer is thus completely free from the tension of buying quality seeds, fertilisers or bringing tractors; yet they remain masters of their land. The industry and farmer/ Gram Panchayat can mutually work out over produce.

The Budget may announce special incentives for the Farmer-Industry Parnership (FIP).

Water Issues: Irrigation of fields is major cause o concern in rural India. The Budget should make special announcements for developing large canals/ lakes which connect the rivers and also store rain water.

Inter-linking of Rivers: Fund allocation and strict monitoring for inter-linking of rivers is another major announcement that we expect from the finance minister. Though arguments may be given regarding inter-state dispute over rivers but the government needs to take bold steps in this direction for the benefit of farmers.

There are several rivers which come in spate every year during monsoons while several areas still get less water. Funds needed to dig out canals from rivers in spate to be routed to such areas which are deprived of water. There are plenty of experts on water issues and special committee should be announced to handle this issue with all seriousness; despite all criticisms.

Desilting of River Beds: Flooding of areas has become a regular feature during monsoons due to rivers coming in spate. Desilting of numerous rivers is the need of hour and the finance minister should announce special funds for the issue. If done with sincerity and honestly the depth of rivers will increase and flooding of nearby areas can be checked.

Desilting and depth of rivers is more important as it would enable launching and functioning of water transport which is the prime dream of the prime minister. 

Kisan Malls: We in urban areas enjoy the glamour and benefits of super malls where all our needs are met under one roof. Why not similar malls in rural areas where villagers and farmers can visit and meets their requirements including those pertaining to farming. For example the mall can house shops for seeds, fertilisers, agricultural tools, banks, ATMs besides other commodities of everyday use. 

The Budget should make special package for such a provision so that the farmers and villagers too get modern facilities locally. Large groups like Reliance or Big Bazaar too can venture into this field and give benefits of their experience to the farmers.

Power Issue: The villages of India have complains for non-availabilty of electricity or power which hampers production esides giving tough conditions for everyday life.

Let there be special provisions for maximum use of solar/ wind power so that the crisis can be handled effectively. Budgetary provisions can lead to large-scale installation of solar plants, solar cookers, solar lamps etc for the benefit of farmers. Since we have huge open space in rural areas exploitation of solar power should not be a big problem. Even the prime minister has been campaigning for use of solar/ wind power.

For example, Rajasthan is one state which is hottest and gets maximum sunlight in the open fields. Why not have budgetary allocation to encourage industries which can convert heat into energy and help society? Similarly coastal areas get lot of wind

power and therefore such industries should be given grants so that wind is used as source of power.

POLLUTION/ TRANSPORT ISSUES

India is facing the biggest challenge of air, water and noise pollution alongside problem of traffic jams in cities be it small or big. I find that both the issues are inter-related and the Budget should address them simultaneously.

Vehicles, both commercial and passenger, are blamed for rising air pollution and traffic jams. I think the finance minister can control the situation, to some extent, through the Budget.

One, restrict people from buying cars according to their whims and fancies. So far there is no check how many cars a person buys and how many times he buys or sells them. The finance minister must introduce high tax for people buying cars before a stipulated time, say five years. Thus, now onwards nobody would be allowed to buy a car before five years or sell it before five years. If still he intends to do so let him cough up huge tax. 

Two, a lot of people go for luxury or very expensive or imported brands of vehicles. Let such people pay up ‘extra taxes’ because they are financially capable. More so, a person owning a small hatchback and another person owning a luxury imported car pay the same price for fuel though their buying and living capacities are far apart. Then why not tax the rich who is occupying more of road space and gulping more fuel?

Parking Tax: People buy cars and park them on roadside. Let the government introduce parking tax if the vehicles are parked on public roads.

Compact Vehicles: So far a car with less than 4,000 mm of length and upto 1200 cc of petrol engine are entitled for special tax benefits. Increase the definition now and make it 4,300 mm length and up to 1400 cc of petrol engine. This relaxation in the Budget will help people realize their dreams of buying a more spacious and powerful vehicle. But beyond that the Budget should be very strict and impose heavy taxes in increasing order. This means as the engine capacity and size of cars goes the tax levied on them too goes up in slabs.

Restrict Car Ownership: Nobody should be allowed to possess any number of cars he/she wants to buy. Impose tax on people who buy one car after another just for status symbol. Allow purchase of up to two cars falling in compact segment and that too once in five years only. But if you still want more pay for each car in increasing order, i.e. 10% for third car, 20% for fourth car and so on. More cars you buy more tax you pay even if it is small one.

Bicycles: Of late, there has been lot of emphasis on using bicycles for commuting. However, extreme weather conditions do not allow us to us this environment-friendly mode of transport. Therefore Budget should announce special sops for developing and marketing of small/ micro batteries which are cost effective/very affordable and can be fitted on bicycles. This will lead to an increase in popularity of bicycles. 

 

Moreover, reduce tax on cycles so that they become more popular.

Mopeds: For decades automobile companies have stopped manufacturing small mopeds which are highly fuel effficientt, eco-friendly, cheap and easy mode of transportation for the families, especially women. Budget should allow special rebate for battery cum petrol mopeds upto 50 cc engine capacity and having not more than 40 kmph of speed limit. The mopeds may even have three wheels so that women can use them widely.

Pollution/ Greenery: The government spends crores of rupees in plantations. Has it proved fruitful? Honestly speaking not. Make an announcement in the Budget that now onward public parks/ green belts shall be leased to private nurseries who can take it on contractual basis. This will increase green cover and will generate direct/ indirect employment. This task should be accomplished in joint agreement with RWAs.

Benefit: If instructions are issued then these nurseries can be asked to plant fruit trees on roadside and sell the produce. This will again give work to thousands of people and help them in making a healthy livelihood.

BANKING

The prime minister had announced savings account for every citizen of India in his previous term. However, things have fizzled out and the bank accounts are not operative or closed by now.

Bank in every village: The finance minister should announce banks for every village. Private sector banks that are shy of going to rural India or smaller cities should be compulsorily pushed there. The budget should also announce Zero balance accounts in small cities/ villages so that banking becomes a habit and convenience for the people.

The Budget can announce special incentives for private banks if they go to rural or semi-urban areas. We aim that all our cities, big or small, are developed and have all such facilities that are available in metropolitan towns.

The prime minister has a very valid point when he talks of cashless transactions. However, the reality is that cashless transactions have yet to catch up. It is ridiculous to find that many small businessmen or street vendors have gone cashless while many large stores demand cash only.

Cashless Payments: To make things convenient the Budget should reduce charges on POS and make it compulsory for all shopkeepers to use them. The Budget should make it compulsory for every shopkeeper to open a bank account in the name of the shop and the account should be linked to his Aadhar number. This way he shall be less likely to avoid taxes and will accept ATM/ Debit/ Credit cards. Hopefully this measure will be able to check black money operations as well.

Restrict Bank Accounts: No salaried person should be allowed to own more than three Savings a/c. This will help the government to keep better check on people who earn bribes and are corrupt.

Check Traders/ Businessmen: Similarly, there can be several categories for businessmen to have Current and Savings bank accounts. If it is a shopkeeper who files GST at lowest level he can be allowed to own just one Current a/c and three Savings a/cs. In the same manner the businessman can be allowed more bank accounts but only when he declares how much tax he is paying to the government.

The size and location of your shop will determine your tax liability because every shopkeeper/ trader tries to dupe the government by showing losses whereas he earns a good amount in cash.

There is great potential to collect taxes from businessmen and shopkeepers if they are checked properly. They are the biggest tax evaders as well. The Budget should tighten its noose around them.

BLACK MONEY AND CORRUPTION

The prime minister has been promising to root out corruption at ground level and the BJP government has come to power on the

promise that it will end corruption and that it will check flow of black money in the society.

Housing: We all know housing for all is the motive of every government that comes to power irrespective of party lines. Even the BJP promises that it will make sure that every family has a house of its own somewhere in the country. 

But we also know that there are people who have many houses in different cities. There are also people who have luxury homes and some have very modest dwelling units. The Budget should make sure that such disparities are checked and equality to certain level prevails in the society.

So far housing sector has attracted highest amount of black money and it has become the biggest source of investment. Housing is a necessity and how can it be source of investment? If it is so, then the Budget should make provisions that flow of black money gets checked in housing sector.

Restrict House Ownership: The way we have talked of checking number of car ownership we need to restrict number of houses owned by one person or one family.

After all, housing is a need and not an investment. The Budget should make provisions that a person or a family can own a house in relation to its income and tax paid to the government. If I am paying tax in 10% slab I should be allowed to own maximum of two houses anywhere in the country. This can go on in the same manner but the Budget can a cap on maximum ownership of houses/ property. After all, how many properties does one need even if the person/family is paying highest tax?

Travel: Lot of cash money or the Black Money is spent in buying train tickets or air tickets. The Budget should make provisions to check this practice. 

Would it be possible, through Budgetary provisions, to check how many times can a person travel in trains or goes abroad through agent on an excursion?

Weddings & Extravaganza: Huge amount of Black Money is spent in weddings and other show off business. The Budget should impose taxes if someone is going for luxury weddings in luxurious hotels or farm houses. We all know a lot of black money is pent in such weddings and a lot of food and other material goes waste after the ceremonies are over.

SENIOR CITIZENS

The government has been serious about the pathetic condition of senior citizens. Many schemes are launched but the condition of older generation continues to be a matter of concern.

IT Exemption: To empower senior citizens they should be completely exempted from income tax after the age of 65 years. This means every person of the country who has crossed the age of 65 years will not have to pay tax on his/her income, interest earned from savings account or fixed deposits. Of course, this facility will be misused by youngsters as they will deposit lot of money in te names of senior citizens. But there is a catch in this shortcoming too; it will make elders financially stronger as it is their signatures only that will play the crucial role.

Dedicated Wards in Hospitals: The Budget should announce dedicated wards for the elders in every hospital. This way they will have separate doctors and space for their treatment.

Free Travel: I am not sure how the Budget shall handle it but I would love if the government could announce Free Train travel for senior citizens above 65 years of age along with their spouse once in a year upto 15oo kilometres. In other words, let the government make special provisions for Free LTC for all senior citizens above the age of 65 years. 

All our lives we are working and stay busy raising children and meeting social obligations. Old age is the time when elders should be able to see the country with the spouse and the Budget can make it by granting one travel free every one or two years. This will make them happy people, and this will also boost tourism in a great way.

INDIAN RAILWAYS

Since Rail Budget too is part of General Budget a suggestions for our benefit.

Two Divisions: Can we have two entirely separate divisions in Indian railways— One passenger and Two, Commercial. The working and funds for the divisions should come separately and there should be separate specialised staff for each of them

Rail Travel and Reservation: The passenger trains are continuously running in losses despite the fact that not a single of them is empty. The reservations are not easy to get as the trains are booked much in advance.

The Budget should take serious not of train reservation issue. I feel that the cost of ticket must go up with travel time, i.e. the price of ticket booked one month earlier cannot be the same as the ticket booked one hour before departure. 

Travel Only When You Must: We all know the crowd in our trains. This happens because we travel as and when decide to move out. While travelling is a must when you have a reason but one has to think about unnecessary travel as well. The Budget may check this practice by making train journeys costlier in increasing order after a person travelled two times in a single month. This means that a person travels on prescribed fare twice a month but coughs up more in increasing order for every subsequent train journey in the same month. This will not only check number of passengers but will also bring higher revenues for the Indian Railways.

Stop Free Passes: The finance minister should immediately stop all free rail travel passes that are given to lots annually. I understand that railway employees get many passes in a year but their number should be curtail to a maximum of two. When a poor man/ unemployed person can pay for his/ her travel then why free passes who are employed, financially self- sufficient and have all the means to enjoy their life.

Goods/ Commercial Trains: The stations for all commercial operations should be separate from passenger stations. This means the goods train will not come to stations where passenger trains are coming. Separate stations for commerce will decongest stations and will bring more professionalism.

All commercial/ goods train stations should be located either in rural or semi-urban areas. To ferry these goods to bigger cities or metropolitan towns the stations may be developed outside their periphery, some 50 to 100 kms away to say.

Cashless Bookings Only: Indian Railways should stop all kinds of cash transactions. Every booking, passenger or commercial should be cashless compulsorily. 

Also read my previous Blogs (copy/paste given limks)

Rail Budget

http://apurvaopinion.blogspot.com/2017/01/indian-railways-can-earn-well-too.html 

General Budget

2016: http://apurvaopinion.blogspot.com/2016/01/budget-2016-your-attention-please-mr.html 

2017: http://apurvaopinion.blogspot.com/2017/01/normal-0-false-false-false-en-us-x-none.html