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2SpecialTHURSDAY | 10 JULY 2014 | BENGALURUDECCAN CHRONICLE

A budgettells us

what wecan’t afford,

but itdoesn’tkeep us

from buyingit

— WilliamFeather

PEOPLE SPEAK

PEOPLE’S EXPECTATIONSFOR ACHCHE DIN

Fix education & healthcare, signal reformsCCHHAARRAANN SSIINNGGHH

The new gov-ernment hasassumed officein difficulttimes. The cof-

fers are empty, rains arefailing and hard decisionsthat should have been

made a long time ago can-not be put off any more.

Many existing policiesare expected to bereviewed and many newformulated. The UnionBudget offers a rareopportunity, given thelandslide victory of thegovernment, to sweep

away the Fabian Soc-ialist model of develop-ment that had given riseto a license raj. The needis to unshackle the rem-

aining chains binding theenterprise spirit ofIndians.

To convey the messagethat the government isserious about fiscal pru-dence and consolidation,it needs to rationalizesubsidies, especially forfood and fuel. With mal-nutrition and undernourishment having been

neglected sinceIndependence, the newgovernment can ensuredistribution of fortifiedfood, barley, oats, rye,canola oil and flaxseedsthrough the public dis-tribution system. Andto ensure better health,the public distributionsystem should be usedfor distribution of mos-quito nets, and anti-malaria and diarrhoeamedicines. To encouragesanitation facilities anddiscourage open defeca-tion - a major cause ofhigh child mortality- itneeds to offer subsidy. Toencourage higher enrol-ment and better perform-ance of students, a break-fast scheme in schoolsshould be considered inaddition to the mid-day

mealscheme.

The other segmentof society, silently suffer-ing, is the nearly 11 croreelderly population, ofwhich a majority arewomen. A respectable uni-versal pension and insur-ance for people above theage of 65 should not onlyprovide support to the eld-

erlybut also relief

to their families. Toensure credibility of poli-cy making, governmentcould consider two simpleand easy-to- implementmeasures.

First, debt managementshould be separated frommonetary policy, and allcomponents of debt con-

solidated in an inde-pendent debt man-agement office.Second, and moreimportant, the pausebutton on FiscalResponsibility andBudget ManagementAct, 2003, should bereleased and the gov-ernment should pres-ent a credible plan toreduce both revenueand fiscal deficit

without compromising onthe quality of expendi-ture.

To create employmentopportunities, medium,small and micro enter-prises need to be encour-aged and the governmentneeds to focus on provid-ing relief to new start-upsin the sector. The govern-ment, which has a gigan-

tic task of pulling theeconomy out of an abyss ,should seek active partici-pation of the private sec-tor, including deploymentof funds under CSR, fornation building. Given theshort time it has had at itsdisposal, structural ref-orms cannot be expectedbut genuine intentions forthem can be conveyed.The time line for meas-ures like modernizing thetax system, introductionof GST or national VAT,reforming the public dis-tribution system andbuilding specific infra-structure projects shouldbe delineated clearly.

(The writer is RBI ChairProfessor of Economics,IIM- Bangalore).

My expectations liein the revival ofcapital expenditure.The investment

cycle has been on adownward trend, muchlower than our country'sseven per cent target.Investment in physicalexpenditure is a must, asis the repealing of cer-tain laws that provestumbling blocks in theexpansion of businesses.We need to make it easi-er for firms to expandand to enter or exit theIndian market. Mostgrowth will come frombusiness, now that thecurrency is also stabilis-ing and IPOs can beexpected to keep themomentum going. Thegovernment should beable to maintain themomentum through itsbudget.

- RACHIT KOTHARI,STUDENT, IIMB

While creating jobsand boosting theeconomy is all verywell, the social sec-

tor must not be neglect-ed. Health and educationsectors in India receivethe least funding, interms of percentage ofGDP, even less than cer-tain sub-Saharan coun-tries! We should up thisexpenditure to about10per cent, improvedelivery of these servicesand reduce wastage. It isonly through these socialsector programmes thatwe can address the vastinequalities that exist inIndia.

-VARUN SANTOSH,POLICY ANALYST

The Modi govern-ment is lookingvery seriously at

development andrevolutionising the ITsector in every city. ITexports are a worryingtrend. The Bengaluruyouth want drastic policychanges that will attractmore IT companies toinvest here, increase ITexports and make Indiathe IT champion it oncewas. Also, there arethousands of entrepre-neurs trying to make aforay in the market andwe need policies thatsupport this.

— PRATEEN TANDON,TECHIE

The politics ofpoverty is verycruel. In the past

most of the povertyeradica-tion proj-ectsbenefitedonlythosewho wereon theupperside ofthe

poverty ladder. So thegovernment must have ascientific approach tothese projects.

- RS DESHPANDE,FORMER DIRECTOR, ISEC,

BENGALURU

We hope the Centrewill do somethingto bring down the

prices. Middle classfamilies are the main vic-tims of policy changes.

- Mrs. SARASWATHIBHAT,

A HOME MAKER.

The I-T exemptionlimit should beincreased on parwith inflation. The

youth voted for theBJP in a big way assum-ing a major shift in poli-cies. The governmentshould ensure more gov-ernance.

- SHETHAL PATEL,A SOFTWARE ENGINEER

INFLATION

With aweakmon-

soon sendingfood prices sky-rocketing, peo-ple of the cityare keenly await-ing a concreteaction plan tocheckinflation. Mr.KodihalliChandrashekhar,

president,Karnataka

RaithaSangha,deniesthat

farmersare respon-

sible for thepresent spurt inthe price ofessential com-modities. “You

can buy paddyfor just `11 a kgin Gangavathi,Shiraguppa andRaichur whichform the state’srice cradle. Butin Bengaluru youhave to pay `60for a kg of SonaMasori rice. Thisonly shows that

middlemen aremaking big profits. If theModi govern-ment succeedsin clampingdown on thehoarding andmiddlemen, foodinflation can bechecked,” headds.

HEALTH

With publichealthinfrastruc-

ture almost in sham-bles, lower middleclass and middle

class families areexpecting the

budget togive it aboost thisyear. While

buildingworld class

hospitals in thepublic sector is stilla distant dream,increasing braindrain and the low

doctor: populationratio is badly ham-pering the healthcare infrastructure.Renowned surgeonDr Vishal Bali ishoping the budgetwill address thehealth concerns ofthe poor and lowermiddle class.“Primary and sec-ondary health careshould be givengreater emphasis.Unless and until wecreate a healthyIndia, it will be verydifficult to develop

a healthy economy. I hope the Unionbudget focuses on

improving healthcare facilities in thecountry,” he says.

TAXATION

The salariedclass iseagerly

awaiting a biggerI-T exemption limitin view of the rising inflation andincreased cost ofliving in the city.They believe thatthose with an

annualincome of`5 lakhmust beexemptedfrom

paying tax.Says Mr. K Ravi,

a FKCCI taxexpert, “I-Texemption shouldbe linked to> inflation. Thehousing loanexemption is negligible at `1.5

lakh and medicalreimbursementhas remained at`15,000 for years.This amount is notenough to treatany disease andshould beincreased to atleast to `30,000.Also the BJPwhich has a simplemajority in the

Lok Sabhashouldn’t have aproblem rollingout GST. If itwants to create aconsensus amongall states, thefinance ministershould announce aroad map forimplementation ofGST in the currentfinancial year.”

EDUCATION

With Indiaall set tobecome

the youngestcountry by 2020,most of itspopulation is

highly depen-dant on educa-tion. However,the lack of infra-

structure, dis-parities in

qualityof edu-cationbetween

rural andurban

areas and ahuge shortfall ingood teachingfaculty, has thesector crying forreform. “TheHRD ministryneedsto understand

that a mereMasters degreeor a PhD makeup for pedagogi-cal skills. Fundsshould also beset aside toimproving thequality of teach-ing,” says ProfG.K. Karanth, for-mer director,

ISEC. “Mr Modihas talked

about digitisinglibraries inBhutan, but hemust do thesame here.Colleges in ruralareas are badlyin need of infra-structure devel-opment.”

HOUSING

Affordablehousing forall remains

a major challengedespite the lastgovernment’sefforts to addressit through theJawaharlal NehruUrban RenewalMission

(JNNURM).Says ProfS.R.Keshavaof the

depart-ment of

economics, Ban-galore University,“UPA failed toimplement multi-billionrupee hous-ing projects dueto corruption inthe allocation of

houses. I want MrModi to come outwith a comprehen-sive data systemand transparencyin the distributionof houses. Thegovernmentshould allow FDIin the manufac-turing/ productionof low cost con-struction materials

and increase fundsfor housing proj-ects. Althoughthey are supposedto be low costhousing projects,in reality they areexpensive. So itsimportant that webring in low costtechnology andallow FDI in thesector.”

INDUSTRY

As the sen-sex soarsin expecta-

tion of a soundBudget, industryis looking for-ward to meas-ures that willhelp it make big-

ger strides.“Measures

to con-taininfla-tion

musttake top

priority,” says MrA.N. Chan-dramouli, presi-dent, BCIC,emphasizing thatsteps be takento improve thecurrent accountdeficit, which hasalbeit shown a

sharp declinefrom recordhighs of $88.2billion in 2012-13to $32.4 billion in2013-14. Investorconfidence coulddo with a boost,as could FDIflow, in his view.“Infrastructureneeds a big fillip

for it will boostthe overall econ-omy. Populistschemes shouldbe cut, landreforms made

pragmatic andindustry-friendlyand implemen-tation of projects accelerated,” he says.

FOREIGN DIRECT INVESTMENT (FDI)

Foreign DirectInvestmenthas been

high on the gov-ernment’s prioritylist for nearly adecade. But whatwill opening upIndia’s huge, welldeveloped retailmarket to foreigninvestors mean

for the coun-try’s econ-

omy?.“FDI perse willboost

theinvestment

capability ofour country and isessential for eco-nomic growth,”feels MrSampathraman,president,Federation ofKarnatakaChambers of

Commerce andIndustry (FKCCI).“We welcome it insectors like rail-ways, defenceand telecom, aslong as Indiaretains at least 51per cent control.Investors likeWalmart shouldbe allowed 50 percent entry intothe retail sectoras long as they

contribute toinfrastructure too.We need coldstorages and vanswith freezers tomove agriculturalproduce from thefields to the mar-ket. Foreign retailgiants must bewilling to complywith this if theywant a share ofour retail market,”he adds.

State officials areexpecting majorannouncements

in the field of infra-structure includingFDI, and more budg-etary support for key

projects likeNamma Metro.

Prof. JillellaSatya SaiKumar, urbanplanner, Indian

Institute ofScience (IISc)

points out there is ahuge gap betweendemand and supplyof financial resourcesfor development of

urban infrastructure.“I am expecting morefocus on urban infra-structure in the budg-et. According to one

estimate by 2020,more than half thecountry’s populationwill be in urban areas.So there is a need to

pump in huge sumseither directly orthrough FDI. The BJPin its manifesto hadproposed 100 smartcities. I think thesesmart cities should begreen-renewal energycities. I also feel gov-ernment should focusmore on an urban railsystem which is notnecessarily operatedby the Indian rail-ways. A ring rail sys-tem should be consid-ered for cities whichcan be implementedthrough FDI,” he says.

INFRASTRUCTURE

It is the duty of theEconomic Survey to makethe right noises, and theburden of the UnionBudget to make the

difficult choices.MadhavanNarayan @madversity

Dear analysts andfinancial journalists,the only link betweenEconomic Survey andUnion Budget isspeculation.GautamChikermane@gchikermane

Educationindustry seek-ing strongerfocus on skilldevelopmentwith betterincentives fromUnion#Budget2014

The hope generatedby Modi Sarkar isvery much till today.Stock marketupbeat, muchdepends upon unionbudget on 10th July. Nikhil Wagle@waglenikhil

Will Narendra Modi’s first budget as Prime Minister mark the coming of ‘achche din’? His short stint has

already seen a whopping 14 per cent hike in railway fares, rise in price of petrol, diesel and food items.

On the eve of Budget day, TEAM DC takes a look at what the Aam Aadmi wants

EXPERT COLUMN

The Union Budget offers a rare opportunity, given the landslide victory of the government, to sweep away the Fabian Socialist model of development