oppn parties The Economic Survey Brings Good News

News Snippets

  • Corona cases in India cross 4000 and the death toll stands at 124
  • The government decides to double the testing of corona suspects from 10000 now to 20000 in the next three days
  • Flipkart assures employees that there will be no job or salary cuts due to the COVID-19 pandemic
  • Although it was obvious, but the government still clarifies that there is no need to switch off appliances and only lights need to be switched off on April 5 at 9pm after confusion in the minds of some people
  • PM Modi and President Trump decide "to deploy full strength of (Indo-US) partnership" to fight against COVID-19
  • 17 states have reported 1023 cases of coronavirus linked to the Tablighi Jamaat, which translates to 30% of all positive cases in India
  • The government says people should not use alcohol-based hand sanitizers before lighting diyas or candles on April 5
  • The railways say there is no certainty yet when services will resume after the lockdown and a final decision will be taken in the next few days
  • As coronavirus cases multiply in Assam, six north-east states seal their borders with the state
  • Power System Operation Corporation Ltd. (POCOSO) putting all systems and protocols in place at war-footing to ensure there is no grid failure due to reduction in demand on April 5 at 9 pm
  • Power ministry scotches rumours that the power grid might fail due to the 9-minute blackout called by PM Modi on Sunday, April 5
  • Centre asks people to wear home-made masks if it is absolutely essential for them to step out of homes
  • Centre asks states to allow licensed street vendors to sell essential items
  • 8000 samples were tested across India on April 2, but the government said that testing will be need-based and will not be used as a confidence-boosting measure
  • Air India operating special flights to fly passengers stuck in India since the lockdown
26 nurses and 3 doctors test positive for COVID-19 at Wockhardt Hospital in Mumbai, facility cordoned off, no entry or exit permitted from the hospital
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The Economic Survey Brings Good News

By Sunil Garodia
First publised on 2015-09-22 12:51:36

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
If the Economic Survey is taken as a summary of what happened in the last fiscal and a statement of intent on what is likely to happen in the next, then the 2014-15 version holds out a lot of promise. Although the author, Chief Economic Advisor Arvind Subramaniam, has said that he found the revised GDP figures puzzling and that the Indian economy is still recovering, he has pegged the growth rate in 2015-16 at anywhere between 8.1 to 8.5%.

Falling oil and commodity prices, combined with an inflation that has not been allowed to run away to stagflation, augurs well for the next year. The weather office has predicted a good monsoon, adding tadka to a dish that seems to be cooking well.

Now it is upon the government to usher in reforms on all fronts, provide the investment push in the short run and clear the hurdles for the private sector in the long run. The ES, though, says that the reforms are more likely to be of the mundanely important variety, rather than big bang, in the short run. This is sensible enough. We have too many hurdles in the Indian economy. Big bang reforms are not likely to yield impressive results if these hurdles are not removed. Hence, it is the smaller reforms that should have precedence.

We have a vicious cycle where our PSU banks are in very bad shape. This is mainly due to the fact that nearly 400 huge projects, involving awesome sums of money, have been stalled due to various reasons (Coalgate and environmental clearance being two major stumbling blocks). Banks have loaned money to these projects. They are not getting any interest, let alone the prospect of getting back the principal. Most of these projects are in the private sector and are unlikely to be viable anymore, even if they are cleared expressly. Money has gone down the drain and the government is not in a position to put in such sums in the PSU banks. The Survey recommends that there should be a four-pronged solution for banks: deregulation, differentiation, diversification and disinterring. The Survey also recommends instituting a mechanism for the government to jointly set the monetary policy goal along with the RBI.

The Survey reiterates the need for implementing GST soon and bringing about reform of direct taxes. It calls for minimum exemptions coupled with low rates and says that there should be predictability and simplicity in procedures, things that are always recommended but seldom incorporated as the CBDT mandarins like to confuse both the taxpayers and the minister.

The Budget tomorrow is expected to bring about many of the suggested reforms. Many, especially the impatient corporate sector, will find such reforms to be too little, too late. But the fact remains that rushing in for big reforms before preparing the ground for them by ushering in the smaller, but more vital, reforms would not yield expected results. They have to understand that the Budget is not the only time the government can bring in reforms. The Budget can lay the ground â€" the reforms will come later in the year.

Interestingly, as soon as the Economic Survey was made public, the stock markets started their steep climb, with the Nifty ending the day 1.85% higher and the Sensex 1.65%. Do the markets know something which ordinary folks like us have missed out? Or is it that the markets have factored in the good news of the Budget in advance and will fall tomorrow? Let us wait and watch.