Arindam Chaudhuri
DREAM BUDGET FOR 80% INDIANS
Daring To Think Beyond Harvard, IMF & World Bank

An alternative to Chidambaram-Manmohan-Montek's dream budget for 20% Indians.


Mr. Chidambaram is the top dream merchant of the Indian Monopoly-Oligopoly combine. He is supported by their media manager cum journalists-cum-columnists of all colours from the red 'leftist' to saffron 'rightist' to mother of all politics 'The Dynastic Party' working with die hard 'criminals' under the compulsion of 'coalition politics' guided by 'The Inner Conscience'. The common factor that characterizes all these parties is the absence of 'inner party democracy' and visible presence of criminals in vantage positions converting the 'Democracy' into 'Demonocracy'. Hardly any one sits in parliament, who has not taken advantage of the mass illiteracy manipulating public opinion right from the first 'elected' parliament throughout last 53 years. No Prime Minister has cared to educate the people, lest the hypocrisy and criminality of electoral process is revealed, leadership caught unmasked and rejected whole sale.

If we are serious and wish to depart from rhetoric and tokenism, the following additional programmes should have been an integral part of Budget 2005:

1. Resettlement of Slum Dwellers:

This is no wonder that the budgets year after year have been characterized by high sounding pro-poor rhetoric like 'garibi hatao', 'rojgar yojna', etc. In recent past 'India Shining' malls and multiplexes of millions of square feet are being constructed at more than Rs.1000/- per square ft. matching and surpassing the most modern market places of the west. Yet sprawling dingy, dark urban slums are coming up where almost 40% of urban population live in squalor and most unhygienic conditions without proper drinking water and sanitary facilities. Every political party ('left' is no exception) does not hesitate to demolish and evict the slum dwellers in the cruelest fashion, bulldozing shanties and setting fire on huts, no matter if children and women are killed or maimed. Though a budgetary provision of Rs.22,500 crore per annum could replace the slums by constructing in 5 years about 15 million two-roomed 250 sq. ft. flats at Rs.300 per sq. ft. Money could easily be obtained from the surplus fund lying with banks who find it difficult to utilize the fund deposited with them. Money could also be collected by selling a part of the land occupied by slums and erecting high rise buildings on the remaining land. A humane and compassionate approach to the urban poor has never characterized the dream budget of any Finance Minister guided by the 'noblest' of 'Prime Minister' down from Nehru to Vajpayee whether they recite or write poetry.

2. Employment for All:

In our February issue titled “Vision 2010: 76 million jobs” we have indicated 76 million jobs in five years i.e more than 15 million jobs each year can be created in small scale, cottage and rural industries along with development of agriculture, food processing, forestry, fishery, animal husbandry, poultry etc. Investment required per employed person in such areas is in the region of around Rs.20,000. This means a budgetary provision of around Rs.30,000 crore per annum is necessary. Since liquidation of unemployment will require at least 10 years, we have to make provision of unemployment benefit for the unemployed youth in the transitional period. A budgetary provision of Rs.24,300 crore will be required even if we only pay Rs.150/- per month to the unemployed youth. Additionally, we may provide them with a bicycle to be utilized as transport to carry goods from interiors to the market or for door-to-door selling so that young people turn into entrepreneurs. Unemployed females may be provided with sewing machines, etc for augmenting family income. A budgetary provision of another Rs.15,000/- crore need to be made for this purpose.

3. Food for All (BPL families):

An amount of Rs.14,400 crore should be allotted in the budget to provide 30kg food grains per month per family comprising of 5 members at Rs.2 per kg (subsidy has been calculated at Rs.5 per kg) to 8 crore families living below the poverty line. This will require 28.8 million tonnes of food grains. We have around 60 million tonnes of food grain in our godowns. Storage cost at FCI godowns is very high and a part of this will be saved.

4. Education for All:

Free education upto Xth class plus one-year polytechnic education should be provided free to all Indians upto the age of 17 and thereafter 1 year education through social service should be arranged. Marginal cost for this program has been calculated on the basis of additional cost to be incurred for 4 years' education after compulsory education upto VIIIth class for all Indians as foreseen by the Constitution of India. This would engage 15lakh teachers (at an annual cost of Rs.48,000/-) involving 4 crore youth and a budget of 7200 crore. Another 50% as overhead cost will be necessary implying a total cost of Rs.10,800 crores per annum for this programme.

As per our estimate, the true cost of free education to all medical, engineering and management students, inclusive of boarding and lodging, comes to around Rs.2000 crores. Providing medical, engineering and management education totally free will give us the freedom to extend search for merit to 100 percent of the population, which until now has remained confined to 20 percent of the populace only. We have to make rural residency practice upto 5 years compulsory for doctors studying at social cost to bring modern medical benefit to the rural population. Construction of modern habitation centres in the middle of a cluster of 10 villages may be undertaken so that proper dwellings and education facilities for children can be provided to doctors, etc residing in villages. This would cost Rs.6,000 crore per annum for the next 5 years.
5. Health and Social Security

Health Insurance, Aids care, Sanitation and Life Insurance benefit need to be provided to the masses at large. In our book 'The Great Indian Dream' we have worked out the cost of providing free aids care, health insurance and sanitation for all. It comes to around Rs.21,000 crore per annum. We would like to provide for untimely death, disabling injuries to earning family member(s) due to accidents, etc. It has been assumed that we have to provide for 5 lakh families by offering a pension of around Rs.2,500 per month. This will cost Rs.1800 crore.

6. Justice for All:

To speed up justice delivery system, we need to increase the number of judges by ten times. A total provision of Rs.7200 crore per annum for this purpose is necessary. No budget should be regarded as complete if we do not provide for special courts and effect speedy trials of our politicians (often ministers, MPs, MLAs) implicated in cases such as fodder scam, murder, rape, etc. so that they can enjoy the fruits of their popularity with dignity. An annual provision of only Rs.500 crore should be made on this score considering their small number which still does not exceed a few thousand.

Sum total of all these provisions which are necessary so that the bottom 80% can live with dignity would come to Rs1,55,500 crore. Doing so would enable our Prime Minister and his party's 'inner voice' go into history book as the ones with humane face. We have dreamt together for the bottom 80% of the people without pointing out the additional sources of funds required for the purpose. We shall not disturb the dream of the top 20% of the population which 'Dream Budget' of Manmohan-Montek-Chidambaram's (M-M-C) team is likely to produce. Dream Budget is also likely to show a 'human face' and for whom the heart of our politicians beat by providing for an utterly inadequate sum of Rs.30,000 50,000 crore for 35 crore people below the poverty line, i.e., Rs.900-Rs.1400 per capita of which a major part (60-85%) would be lost due to corrupt practices.

In our book 'The Great Indian Dream' we have suggested how to raise the money required for the schemes (ref. pages 187-192). This would result in increasing Tax:GDP ratio from its current level of 14.6% to around 24%. If this rate is unpalatable, two other routes may be suggested. First route foresees utilization of atleast 50% of $130bn forex kitty with Reserve Bank of India in infrastructure and other productive projects which will not create additional inflation other than the planned inflation found acceptable by the wise trio of M-M-C. The second route is to free us from the bondage of Harvard-WorldBank-IMF inspired doctrine that fiscal deficit is to be restricted to the level what developed countries find it proper and to their interest. Fiscal deficit in a developing country with excessive unutilized productive capacity unlike in the West, where capacity utilization is very high except for bouts of depression and crisis, has different implications. Fiscal deficit need not lead to inflation since increase in demand caused by money supply will be followed by increase in commodity supply due to existence of unutilized capacity. Even if there is some inflation, GDP growth rate will not be affected. The Chinese experience is relevant here. Chinese inflation rates in the year 1993, 1994, 1995 was approx 14.7%, 24.1% and 14.8% whereas GDP growth rates were 13.5% 12.8% and 10.8% in those years respectively. Besides, steady dose of inflation (say, not exceeding 7% yearly) would help rectify undervaluation of currency of developing countries like India. Experiences in India and elsewhere also indicate that it will not affect exports. Developed countries as a group is interested in undervaluation of currencies of developing countries. Hence, IMF-WorldBank attempts to keep the fiscal deficit as low as possible. Regulated yet flexible fiscal deficit releases our productive forces, helps utilization of unutilized productive capacity and redress the century long injustice of being trapped into non-equivalent exchange (the other name for neo-colonial exploitation). Our dream is on… and has been put in black and white. Hope our economic craftsmen would give it the right shape and contours.
 
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