India -Budget 2021-22

Budget estimates of total expenditure during 2021-22 is Rs.3483236 crores compared to Revised estimates of total expenditure of Rs3450305 during 2020-21, The increase is only about 1%,. However compared with actual expenditure of Rs.2686330 crores in 2019-20 , the increase in 2021=22 is Rs,796906crores which is about 30% which is good. But taking into account the inflation, the expenditure estimated in 2021-22 is not enough to achieve high growth in GDP.

Usually, the growth in GDP is directly proportional to growth in govt. and private sector spending. Since the govt expenditure is low, government should permit and facilitate higher investment by private sector. Divestment is one important tool to increase private investment but then govt.investment would be reduced.

Government should encourage higher consumption of only essential items but also luxury items like air conditioners, refrigerators, vacuum cleaners, microwave ovens, etc by facilitating easy loans. Government should also permit private investment in generation and distribution of renewable energy, investment in railways, roads, transport, water storage and distribution, education, health etc

In the alternative, government could borrow money from Reserve Bank of India and spend liberally. An additional spending of Rs.20,00,000 crores will ensure very high growth in GDP. The loan can later be monetized. There will be inflation but this will be easily borne by the people with the additional working members and higher wages.

Better ways to minimise black money than demonetization

There are better ways than monetization, to minimise black money. Some of these ways are;

1. holders of black money could be allowed to bring out black money with or without payment of taxes/penalties if they (particularly in industrially backward areas)set up factories which will give employment to certain number of people. By this scheme a number of people will get employment in construction of factory and in running the factory, transport etc . In a country where educated unemployment is large, this step will prove to be beneficial to the people/country. It will also contribute to government funds by way of licence fees, duties, taxes etc. The scheme to be successful, black money holders should be assured that no questions will be asked and no adverse publicity will be given.

2.Black money could be used for laying /widening roads, and the holders could be permitted to collect toll charges

3.Black money could be allowed to be used to construct new railway lines and run trains and/or be permitted to collect charges from those operating trains on the new lines.

Black money could be allowed to be used for other infrastructural projects

In these schemes the focus is on utilizing black money for the betterment of the country rather than punishing the holders. The wealth of the country is the combined wealth of its individual citizens. The gap between the rich and the poor can be bridged at a later date, when the country is well developed.

India-Republic Day and Independence Day celebrations

At present main celebrations of Republic Day and Independence Day are held in the capital of the country. Of course celebrations are held in state capitals and district headquarters also. It may be worth considering whether these most important events could be held in each state capital in turns. Similarly, the important events taking place in state capitals on Republic Day and Independence Day could also be shifted to different district headquarters in turns.

In addition to holding parades and cultural  pageants, Republic Days could be marked by launching of grand schemes like laying foundations for large projects, inaugurating new and additional railway lines,  laying foundations for new roads or widening of roads, opening scientific and technological  research centres,  lanching new research projects etc. This will incidentally ensure that atleast a few major projects are launched each year.

Offices, factories etc.could also funcion at least for a few hours for the celebrations and for taking pledges for improving the working, services etc.

The practice of inviting a foreign dignitary to be the Chief Guest for the celebrations could continue. It may also be considered whether prayers by different religious leaders-Hindu, Muslim, Christian, Sikh etc.- for the well being of the people of the country could also be included in the celebrations.

Indian Projects- no need for foreign loans

There is news that India will get a loan of $160 million from World Bank for modernizing roads in Rajasthan. When the money is received by India, the equivalent amount of Rs.996 crores will be brought into circulation in India. It may come from the reserves and /or from printing currency notes. Roads can be modernized without importing any material from abroad or in other words there is no need for foreign exchange for the project. Only Indian Rupees is needed and this is available in India or can be printed. Inflation will be there whether loan is taken from World Bank or the Indian currency is released into circulation without taking loan in foreign currency from abroad. So in cases where imports are not required for projects loans should not be taken from abroad and the required amount should be loaned by Reserve Bank of India.

Employment generation is easier in developing countries

There is a lot of scope in developing countries for creation of employment avenues. In developed countries, the scope for laying new roads is limited as they already have sufficient roads. Similarly, there is very limited scope for laying railway lines, drawing electricity and telecommunication lines, in building houses, in building lakes and digging canals, laying sewerage, expanding supply of piped gas etc., as saturation point has already reached. But in developing countries, the scope is unlimited. In other words, while it is difficult to generate employment in advanced countries, it is very easy to do so in developing countries.

All the works mentioned above, will not only eliminate unemployment, but would lead to labour shortage. However, priority should be established for undertaking the different works. Irrigation and agriculture should get the top priority. After digging lakes and irrigation wells around the lakes, it takes only about 4-5 months to get additional production of food grains. The second priority should be to set up cotton ginning, spinning and weaving mills and ready made garment units.

Funds should not be a problem as currency notes can be printed. This will not lead to long term inflation as with the digging of lakes, wells and canals, the production of food grains and other agricultural produce will increase which will lead to decrease in prices. Inflation would be there only for a short time, between the start of the work for digging lakes etc and the harvesting of the agricultural produce.

Minimising corruption- discontinuance of subsidies and grants

It appears that if the government stops giving subsidies and grants to the people, corruption can be reduced. To ensure that the people do not suffer in the absence of the existing grants and subsidies, full time jobs could be created for them. In countries like India, it is very easy to create jobs. In countries like Japan, no more roads and railway lines need to be constructed but in India, the present length of these facilities need to be increased by five fold.

In Tamilnadu, people get rice in the ration shops (government distribution shops) at Rs.1 per kilo. In the shops, the minimum price of the rice sold (the quality of course is a little better) is Rs. 20. Every month, a family gets 20 kilograms of rice for Rs. 20 from ration shops. They save Rs.380. If issuing ration cards is delayed by even two months, the family would lose Rs.760. The officials in charge of issuing ration cards may think that when the family saves Rs.380 per month on rice alone (sugar, pulses, kerosene etc are also supplied at ration shops at lower rates), why should the family not pay him Rs.250 for his signature. This is how corruption starts. The family may feel that even after paying Rs.250, they would save substantial amount in getting ration card without much delay and so, may not mind bribing.

The Government provides scholarships to children and the amount is substantial. The Government also provides Television sets, cooking gas and stoves, agricultural land, certain seedlings, electricity for agriculture, house sites, clothes for festivals, marriage grants for girls, meals for pregnant women, expenses for childcare at the time birth, school books, uniforms, mid-day meals and much more all  free of cost. The Government also provides grants and subsidies for certain industries. Depending on the benefit that the grant/subsidy receiver gets, the official concerned may demand and the individual may not mind paying a bribe. Mainly, a few, who do not get any benefit for the service for which bribe is demanded complain.

Few people say that they got government jobs by paying bribes. None of them has any complaint. All of them seem to think that they can earn this money through corruption in a few months.

The other reason for the breeding of corruption is that there is no transparency in handling the issues. None of the employees including the senior most officers of a department or even the senior most officers of the government replies to the correspondence he receive, either by mail or by email. If people think that they can petition to the senior officers and get their due, they would not bribe lower rank officials. If every office is made to render their services to the extent possible, corruption would come down. For example, a person could apply for a ration card by post to the Village Administrative Officer who should be required to forward the same to the revenue officials after verification. The revenue officials should be asked to prepare the ration card and send the same directly to the concerned family, with a copy of the covering letter to the village official for his record.

In India, common people are the ones who breed corruption. They demand money for their votes. They demand several things, free of cost. There was an instance of people in a few places going to the private jewellery shop and demanding them to sell gold at Rs.500 per 8 grams against the prevailing price of Rs.10,000, saying that they heard that government had issued orders for the same.

After independence people have become lazy with the introduction of modern farming methods and modern gadgets in households. The time saved by the use of machineries is not used to do other work. They just rest and this has made them lazy. The governments have taken upon themselves the duties which the parents and other family members are to perform. In return, the government does not get any thing free from the people.

Corruption could be reduced considerably, if the government discontinues the subsidies and grants.