The biggest festival of democracy has just concluded, bringing to the fore, the responsibilities the new government by getting on the mission-mode, on the economic, military and social front. What are some of these battles, and how can it address them?
The biggest festival of democracy has just concluded. People have voted in the 17th Lok Sabha. The fact that the event was gigantic can be viewed from the number of participants. About 90 crore voters were registered as eligible voters, and 67% of them cast their votes, which was the highest ever. It was also the highest-ever participation by women voters.
The largest democracy in the world showed the world that it was not only the largest in numbers but that it has awakened and mature voters. People elected a single party majority government, together with a large number of elected representatives from a pre-poll alliance. It was after more than four decades that a single party majority government was given a succeeding term by the people. Our electoral performance is much ahead of the performance of the oldest democracy (US), as, in the preceding Presidential election in 2016, only 58% of registered voters voted.
The government has been elected and now the process of governance should start to make our country stronger and better. The re-elected government has to start working on a mission- mode to achieve that and to fulfill the hopes and aspirations of the people. The government will be guided by intellectuals, think tanks and its own Niti Ayog, together with the in-house expertise of the council of ministers for charting the second tenure and I am sure that the best path will be adopted. However, through this column, I too express some of my humble views.
No doubt, we are the fastest growing major economy, but we still have a long way to go before we become a developed country. We still have about 27% of the population living below the poverty line. We have the economic problem of unemployment in a big way. We have the problem of agrarian distress and we still see many farmers committing suicide. The new government has to take some tough measures, which may not be politically prudent. With the luxury of a huge mandate and having a strong and decisive leader, hard measures can be taken.
We have to increase our manufacturing activity and for this, we need labour law reforms. This has been pending for a long time for the fear of trade unions affiliated to various political parties. Industrial houses have no control over the unproductive labour because of archaic labour laws. This adds to the production cost and also serves as a disincentive in widening manufacturing activities in the country. Increasing unemployment is the result of this. We have been successful to some extent in improving the ease of doing business in the last five years, but labour laws still remain a stumbling block.
About 90 crore voters were registered as eligible voters, and 67% of them cast their votes, which was the highest ever... Our electoral performance is much ahead of the performance of the oldest democracy (US), as in the preceding Presidential election in 2016, only 58% of registered voters voted
The other crying need for improving our industrial base is an amendment in land acquisition laws of 2013. We require land for development and for the much needed factories in the core sector, but it becomes humanly impossible to acquire it. The laws of 2013 stipulate that rural land can be acquired at five times the market price while in the case of urban land acquisition, the cost will be four times the market price. Added to such high cost is the other hurdle of taking the consent of at least 70% of the people whose land is sought to be acquired. The high cost of land and the time taken in the process of taking consent makes it impractical to start new industries even if they are most needed. The government has to take some hard measures without hurting the farmers and avoiding acquiring agriculturally fertile land.
Still, on the economic front, another battle which we have to fight is on the export front. Our exports are not rising, while we have a huge import bill, mainly due to the unavoidable import of crude oil. We have to work fast and take stock of the US-China trade war and rework our strategy to boost exports. The US is going to import less from China and we have to work as a sustainable exporter to the US. We have also to settle our own trade issues with the US, particularly in the realm of generalized preferential trade tariff so that our export to the US moves smoothly. We have to pay attention to our loss and to the quality of products so as to compete in the world market. We can also consider giving incentives to our exporters.
Together with economic health, we also have to increase our military strength. We have Pakistan on one side and on the other an expansionist China, which are virtually encircling us. We cannot afford to keep our eyes shut. We do not want war but we have to be a militarily strong country to prevent war. We have to acquire or manufacture latest war equipment and fighter planes. We have to be militarily strong also for the reason that the world listens to powerful countries which are both economically and militarily strong.
The new government has a vision to invest Rs.100 lakh crore in infrastructure in the next five years. The government must be appreciated for this, as the same will go a long way for development and also for job creation. But then the issue arises, as to how funding can be done for this endeavour? Our income from taxes is around Rs.20 lakh crore as of today and most of that goes for revenue expenditure with only a modest proportion left for capital expenditure in key areas. We had a fiscal-deficit of 3.5% in FY 2018-19, which means that to this extent we have to rely upon borrowing to meet the budget. The government will have to take some unpopular measures to raise its tax income but taxes should not burden the middle class or come in the way of economic growth by hurting the corporate sector. Income from agriculture is exempt from tax as of today. However, when the country wants money for its development, the income of big farmers should be considered for taxation.
We do not want war but we have to be a militarily strong country to prevent war. We have to be militarily strong also for the reason that the world listens to powerful countries which are both economically and militarily strong
There is no reason why income exceeding Rs.10 lakh from farmers should not be taxed when petty workers having income above Rs.5 lakh have to pay tax. There are farmers who enjoy the luxury of riches with no tax liability and it is my humble suggestion that such farmers should come into the tax net and the same will also help raise additional resources without hurting the economy.
Similarly, all religious trusts, across religions, having an income of more than a crore should be considered for a moderate tax of 10%. The surplus incomes of religious trusts are for the benefit of the society and hence a 10% tax can be considered as expenditure for the welfare of the people. Raising such taxes will not burden economic growth but will bring additional resources to invest in development and towards welfare measures.
Further, the government has to consider measures to unlock the huge amount of tax money locked in appeals. The government has executive control over commissioners (appeal) and hence there should be a directive that all the appeals before them should be disposed of within six months. Even Tribunals can be approached for speedier disposal of appeals.
We always say that we have an ancient civilization and a very laudable culture and that in the olden times, India was the spiritual leader of the world. We should try to get back our lost position of ‘Jagat Guru’ and show the world what we believe in. For us, the entire world is one big family.
The government in its previous term popularized Yoga all over the world and even succeeded in getting a Yoga Day declared by the UN. We have to proceed on a similar line more vigorously. We have to do more ‘soft power’ export and in our embassies, we should have a designated secretary for popularizing our culture and philosophy. We should do more to popularize our food and fashion all over the world. This will have double benefits for us, on the one hand, the world will know us in a more positive way, while it will also give us an economic advantage.
With the bigger mandate, the new government has a bigger responsibility and we have hope and faith in our government. We all should do our duty and help the government to serve us better.
by S K Jha
