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Dear Readers,

One night, a friend of Swami Vivekananda heard him sobbing. He went to his room and asked him, ‘Are you sick?’ Swamiji said, ‘No. I am sobbing after realising the pangs of crore of people who live in dire poverty, suffering from hunger and malnutrition.’ Saint Tulsidas said in the epic Ramayana that the pangs of poverty is the greatest suffering of mankind. Aware of the observations on poverty made by Saint Tulasidas and Swami Vivekanada, Prime Minister Narendra Modi has been making the best efforts for inclusive and sustainable growth. But these efforts have been hampered by the problem of practical execution. The Prime Minister has to work out schemes so that all who are working with the government discharge their duties fearlessly and selflessly. They must be made responsible and accountable for delays and non-execution of policies of the government.

The nation has to come out from the conflict of ideology, populism, socialism, capitalism, casteism, and power mongering based on religion. So Prime Minister Modi has given strict instructions for the speedy relief to farmers in distress and to adopt immediate measures to generate jobs for the youth. This can be addressed in the Union Budget 2018-19. Growth and employment should have priority over keeping fiscal deficit within limits. Limit on fiscal deficits will slow growth affecting employment.

India is one of the fastest growing economies of the world. But the growth is benefiting people in sectors other than agriculture, whereas nearly two-third of India’s population continues to remain dependent on the agri-sector directly or indirectly. Share of agriculture and allied activities in India ’s GDP is just about a dismal 18%. Economic growth must benefit all.

BE has been reporting about the need for inclusive and sustainable growth. Government has to focus on agriculture, pisciculture, animal husbandry, horti-culture, floriculture and so on. These can improve the rural economy. The growth of GVA of agriculture and allied activities was 3.7% in 2013-14, which fell to 0.21% in 2014-15, and is likely to be 2.1 in 2017-18. There is an urgent need to boost the farmers’ income and bring them out of their sorry plight, especially the distress caused by drought and flood. Animal husbandry can be a big saviour. In the 2017-18. Budget, the government had announced a dedicated fund of Rs 80.04 billion in NABARD for the dairy sector. About Rs 5 billion, the first tranche is expected to be released this month benefiting 9.5 million farmers in about 50,000 villages out of more than seven lakh villages. To achieve 10.4% annual rise in real farm income, capital by both the private and public sources needs to be Rs 4.86 trillion in 2022-23, calculated at 2015-16 prices.

As suggested by BE earlier, the government should build up silos at a distance of 100 km as it is done in the USA. Farmers can store grains and can encash crops as and when they require money and/or when the market price is above the minimum support price. The nation must work towards model villages / smart villages with more and more cottage and small
scale industries. Officials and staff at block levels must be held responsible and accountable for discharging their duties.

The definition of farmers should be changed to include cultivators, lease farmers and share croppers. The government should divert the fund to irrigation, linking of rivers where it is practical to prevent drought and flood, water canals, rain water harvesting, and recycling water for irrigation. Highways and village roads are essential. But the development of six lanes and four lanes should be based on traffic.

NPAs in banking sector are likely to touch 9.5 lakh crore by the end of March 2018. Many companies are in the process of liquidation. This will add to sharp spike in unemployment. A better solution needs to be found. Banks are also facing the brunt. Their credibility is being affected. There is large-scale speculation in the market that government may allow 100% FDI in private sector banks.

The Goods and Services Tax (GST) is lacking practicality. The government has relaxed GST on some items. Some items are taken out from the regime of the GST. But still the government has not realised that the number of GST rates is far too many. Revenue collection from GST is yet to pick up buoyancy.

Meanwhile at Davos, Prime Minister Modi, while welcoming investments into India , also highlighted the issue of rising protectionism and fading globalisation, the menace of terrorism, the unwillingness of several countries to tackle climate change.

100% FDI for single brand retail, which was vehemently opposed by BJP in the past, is now being allowed. This can adversely impact local manufacturers and retailers resulting in more unemployment. India needs to be selective about liberalizing FDI norms in sectors. It makes little to sense to expose sectors to foreign competition where we have a thriving domestic industry offering quality products and services.

India Trade Deficit with China is USD 51 billion in 2016-17. Indian businessmen are just unable to withstand Chinese competition, especially SMEs and steel manufacturers. There is huge dumping from China. Manufacturers are turning traders. In addition, high cost of land, labour, high cost of capital, erratic supply of power, poor infrastructure, all contribute to hamper productivity, quality and hence competitiveness.

To boost private investments, there is a need to improve the business climate by highlighting success stories of businessmen, promoters and entrepreneurs. All approvals must be provided in a time bound manner (say within three months of application), failing which interest should be charged at 8% from the date of all approvals.

There is worldwide rally in the equities. In India , the market analysts believe that the stock markets would continue to be bullish. Conservative investors are nervous about a possible correction. Bond market investors are in a negative feedback loop. Investors should choose to stick to mixed portfolios. Some suggest investing 60% in large cap funds, 30% in flexi cap funds and up to 10% in mid and small cap funds.

History tells that lower rates of taxes increase the revenue as there is better tax compliance (the Laffer Curve phenomenon). India is among the high tax countries in the world. Corporate tax rate is 34.61%. Higher rates of taxes promote tax avoidance and corruption. All cess, surcharges, incentives, exemptions, MAT should be done away with. Various rules and sub rules open a Pandora’s Box of litigation and additional cost and time consuming for tax payers. In name of simplification, law is becoming more complicated. Ideally individual annual income of up to Rs 5 lakh should be exempted. Rates slabs from 5% to 20% may be fixed. Dividend tax in the hands of recipient should be exempted. Let the corporate sectors plough profit to fight sickness in difficult economic times and invest in modern technology.

India celebrated her Republic Day on January 26 with great enthusiasm. The Spirit of nationalism permeates in some. We take inspiration from the words of great saints and philosophers like Rishi Aurobindo who said, “I have three madness: the love for mother, the love for nation and the love for God.” Swami Vivekanand was the Monk Patriot and the dust of India was holy to him.

May Mother Saraswati bestow us wisdom, the spirit of hard work with devotion, righteously, selflessly, and fearlessly so that inclusive and sustainable growth can wipe out hunger and malnutrition and remove the pangs of poverty.