The recent budget presented by the FM
Mr Jaitley took quite a few people by surprise, with especially the middle
class – some members at any rate- feeling short changed. Despite that, I personally
rate this budget as being among the best to come since 1991; sure there are
negatives. Let me take the bull by the horns : Middle Class, you say. Let me be
blunt : The Middle Class got nothing, which exactly what it deserved. No more,
no less. And yet, in this nothing lies the true benefit to this class from this
budget.
This Middle Class represents those
educated people {should / dare I say barely literate? Education implies much
more than degrees}; Those literate and degreed people who you can spot spitting
on the roads, peeing on the roadside, paying bribes, ignoring accident victims.
migrating from India... these people are in a position to do something about
such ugliness - and CHOOSE to do nothing. Do they really deserve more than
their fair share? Call me an idealist – but I don’t think so.
THE
BUDGET : PREVIOUS EXPERIENCES OF THE NDA2
This budget is more of an ideation session, a set of ideas and
promises that can transform ALL India in a very short time - like MII and
Digital India never can. India lives not in the cities, but in the rural areas,
with 84% residing outside top 200 agglomerations {let alone cities!}. That is
why the budget -any budget - should be only for these, the majority. Kudos to
the BJP for doing it. It is noteworthy that they are attempting to reform
agriculture and develop it, not give doles - which is what is needed.
Note that I focus not
on numbers, but on ideas. Ideas lead to numbers each and every time; I have
never ever seen numbers leading to ideas...
Also note that all three major
national level forces are now concentrated on Rural India {or the poorer
classes} - BJP, The Congress, and the Up-and-coming AAP. The cities may not
like it, but there is nothing they can do about it. They are outnumbered 5.5 -
1 in Rural Urban Split, or perhaps nearer aproximately {from memory, could be
off target} 9-to-1 in terms of income..
First this is the 3rd Budget of this
Government. The initial approach was giving a mistaken impression of Suit Boot
Ki Sarkar, with their Urban focussed approach; the previous budget and years
contained premature moves like Make In India, Digital India, Smart Cities,
Bullet Trains, none of which we require. I say mistaken for the reason that
some of their other steps have very likely not been advertised, as the third
article in this series brings out – which lays open the feasibility that they
have done more than they are advertising.
We dont have the existing systems and
the overall ecosystem to support even one of the above initiatives. Take Make
In India, for example - in an atmosphere of 58% MSME contribution to GDP, how
can any such initiative succeed without sorting out ecosystem issues? There are
capacity, credit constraints in that sector to name just two; there are the
issues relating to inverted duty structures, skill related problems, outdated
technology issues and market access issues that need attending to.
You cannot dismantle inverted duty
structures overnight, to consider just one small parameter; it impacts internal
equilibrium, erodes profitability over the short term {another ex - Telecom;
cant say more as am from same trade. Read latest news please}, and creates a
churn. It requires a carefully calibrated approach and a defined plan to
execute a successful turnaround. The beginning has been made, but a lot more
needs to be done, as industry pundits have been at pains to point out.
You cannot rush in and change
everything; the impression the Government was giving was, to me at least, is
that it was in a rush to do too much, leading to premature steps. If you have
to encourage manufacturing, it is true that you have to make finished products
costlier to import – using the exchange rate, duties and other mechanisms to
create a favourable internal atmosphere. But you also have to create the
internal systems, structures that can enable investment in capacity building,
which requires time and a host of changes in quite a few parameters.
BENEFITS
OF FOCUSSING ON RURAL INDIA
While constraints are being sorted our - another sector is begging for attention, which also holds the promise of relief for all. Focussing on Rural India makes sense-
it will increase rural consumption in line with increasing disposable rural
incomes, which will eventually effect positively the business cycle in the
economy as well as Urban Indians, as Manufacturing and Services both will grow,
which are largely Middle Class driven. The population behind it is so large, that
the impact will be much larger than a mere-Urban growth hoping for trickle down
{which - trickle down - is highly debatable, if you consider consumption data
from 1978}
Thus, the point is
moot; the strategy is for the benefit of all. Everyone stands to gain if Rural
Incomes improve, that is a fact.
Where are the products manufactured
that Rural India consumes? Who works in those factories? Either Urban Indians,
or Middle Classes. Thus, what benefits Rural India benefits all India. GIven
the scale- 9-1 and 5.5-1, the impact will be proportionately larger and of a
much wider breadth. Given the finite resources a their command, the Government
has to make some hard choices. The point of taxing the Uber Rich and the creamy
layer, while attractive at first sight, is both difficult to implement, as well
as being a dodby strategem to resort to, as past history of the Global Economy
shows. Thus, some compromises have to be made.
A
WORD ON THE MIDDLE CLASS - AGAIN
As far the emotional aspect of the
matter is concerned, the middle class being overlooked - what middle class are we talking about? The
one who doesnt even bat an eyelid from the comfy AC interiors of their cars as
beggars in tattered clothes beg for the right to survive, as a Nirbhay lies
naked, bleeding and dying in the bitter Delhi winter? The ones who take a bribe from smugglers, with
little concern for the health and safety of their countrymen and women? {Read S
Hussain Zaidi for stomach turning proof of the integrity of our oh-so-great
Middle Class}! The ones who do untold damage to the nation by giving and asking
bribes, using substandard raw materials in their output? The ones who throw
litter on the roads?
Or perhaps the ones who use every
benefit the nation gives them, study till the best levels, and then promptly
run away from the country, raising nonsense like the country did not care for
me, my skills? It was the same country that gave them those skills, by the way.
The same country people find unliveabe - other Indians find good enough to lay
their lives for. They are all the people with the benefit of an education.
Makes me wonder at our education system!
The fact that educated and uneducated
alike show the same behaviour pattern is hardly exculpatory, otherwise, what is
the whole point of an education? There has to be some improvement if you manage
to get an education, isn’t it? For the Middle Class to ask their rights,
collectively we the educated, the Middle Class need to justify the nation's
investment in us. This we collectively are not doing. Sad part is, in the
bargain, those of us who are doing our bit have to pay a little bit extra.
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