By Aakash Sahai
The elections are just around the corner, and the enthusiasm can be felt everywhere, be it advertisement on TVs to random surveys in colleges. At this time, it becomes imperative to evaluate the legitimacy behind this ‘Modi Wave’ before we cast our precious votes. Will ‘Abki baar, modi sarkar’ actually do anything? Let’s see it from an economic telescope.
What Modi plans to do?
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Infrastructure: Promote the development of key heavy infrastructure like new and better roads, highways and revival of old power plants.
Why? Infrastructure is the key to achieve success and is the backbone of any economy; unless India can develop this infrastructure they cannot achieve rapid growth.
Problem: This is not a new idea at all; each and every administration works towards it and already several programmes are in the works by NHAI and PWDs. The chief problems with infrastructure development in India is of environment hurdles and the backlash dished out by the local communities and media, until and unless an effective way is found to get past them, nothing can be done.It is estimated that approximately 1 trillion$ are required by 2017 to achieve these goals. Doesn’t seem like a small number.
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Price Stabilisation: Setting up a price stabilisation fund to keep a check on the prices
Why? It will help in controlling inflation as and when needed and can be used to procure supplies when they dry up.
Problem: This solution too seems mundane as Minimum Support Pricing already exists on several agricultural products, and secondly under the existing National Agricultural Insurance Scheme (in order to protect farmers during crop failure) thousands of crores are given away as freebies to farmers. In 2012 around 22,000 cr Rs were disbursed under the same as claims.
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Higher Education: Set up 13 IITs, 15 IIMS and 21 AIIMS
Why? To undertake promotion of higher education and making it easily accessible for the growing youth population of our country.
Problem: Setting up these institutes won’t do us any better, because the inherent problem lies with the quality and the quantity of the educators. As of now, almost 41% of the teaching positions are vacant in IITs and several other colleges. College going students know it the best.
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Gold: Removal of the tax on gold imports
Why? Gold taxation is leading to rampant smuggling of gold
Problem: Increasing CAD! India imported between 800-900 tonnes in 2013. As of now due to the measures taken by the RBI, we have cut down on our deficit to some extent and moved on to the second rank as the world’s leading importer after China. However, removing the tax on gold can lead to larger volume of gold being imported, and a big gaping hole in our pocket. Rather than removing the tax, measures to curb demand for gold for non industrial purposes should be undertaken.
Inflation: Tame inflation which is currently at 9.87 by controlling the supply side and punishing hoarders.
Why? Because curtailing demand through short term monetary measures alone by the RBI has led to little effect and this problem still looms over our head.
Problem: The problem indeed does lie with the supply side, but the production aspect of it is contingent on changing weather patterns and global commodity prices, add to it the lack of reliable infrastructure regarding weather forecasting and agricultural implements; you get the problem of inflation. If such steps are undertaken, they may severely hit productivity, growth and stifle investment, going against everything that he is propagating. So ironic!
So, who are you voting for?
