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Work together to fix States failing economies

Work together to fix States failing economies
Highlights

Modi 2.0 seems to have got on to serious business.

Modi 2.0 seems to have got on to serious business. This indication was clearly available from the deliberations of the NITI Aayog meeting held at Delhi on Saturday. Modi stressed that NITI Aayog has a key role to play in fulfilling the mantra of "Sabka Saath, Sabka Vikas, Sabka Vishwas".

He asked the States to work towards increasing the country's Gross Democratic Product (GDP) and help it achieve the goal of becoming a $5 trillion economy by 2024.

The States as usual had put forward their demands before the fifth Governing Council of NITI Aayog. All of them demanded more Central assistance to deal with issues like distress in farm sector, natural calamities and the problems that are arising from loss of revenue due to GST. They emphasised on the need for compensation for the loss on account of GST.

Nothing wrong in the State's making a demand for more funds. But then what needs to be seriously pondered over is about the sources from where the Centre gets funds and the devolution of funds to the States.

Along with that, we also need to seriously think about the promises each party makes in its bid to come to power. Unfortunately, no political party makes any serious exercise for the first four years to work an action plan which would be close to ground reality.

In their mad race to come to power, they come up with several promises at the eleventh hour even though practically they may be near impossible and then look towards the Centre for more funds.

India can surely progress at a fast rate if the States' and the Centre agree to stop splurge of funds on populist schemes and be more prudent in fiscal management.

All parties in ruling should first forget about political fight once elections are over and instead of focussing on vindictive politics or strategies to decimate the opponent to secure their future, should show concern towards the development of the country.

Unless the States compete with each other in boosting manufacturing activities and exports to realise the goal of Indian economy, it is not possible to achieve $ 5 trillion economy and tackle socio-economic problems by 2024.

The States should now come forward and take it up as a challenge and rework their strategies and priorities accordingly. Will that happen? This is a million-dollar question as all regional parties and national parties ruling in different States continue to focus their attention more on populist schemes despite the fact that the States' economic conditions do not support them.

Take Andhra Pradesh for example. The TDP government, in its bid to implement direct cash transfer to various sections, had to heavily borrow funds from outside. Now the new government has also announced several programmes like Rs 15,000 per child for education and other Navratna schemes knowing fully well that the State is cash strapped and the flow of funds from the Centre will only trickle and will not flow.

Y S Jagan Mohan Reddy had met the Prime Minister three times ever since he became the Chief Minister of Andhra Pradesh and even in the NITI Aayog meeting made a strong pitch to grant Special Category Status to the debt-ridden State and urged Prime Minister Narendra Modi to be 'gracious' in fulfilling the promise made in Parliament and also in the BJP's 2014 poll manifesto.

His predecessor N Chandrababu Naidu met the Prime Minister and Central Ministers 29 times when he was in good terms with the Centre but still nothing much happened. Situation in other States whether in North or South is no different.

In fact, the NITI Aayog platform should first work in the direction of urging all parties and Chief Ministers to put a moratorium on new promises and see that the agriculture sector and manufacturing sector are first strengthened.

India has great potential for exports and there is urgent need to tap the global markets. We need to urgently improve the supply chain in global markets.

All this cannot be achieved unless there is some consensus among the ruling parties in all the States to put a brake to the populist measures and work towards generating higher revenue and reduce the deficit.

They should work out ways to improve their revenue generation and reduce dependence on the Centre. Hope wisdom would prevail on the politicians running the country.

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