Fiscal extravagance ruining AP, TS

Reminiscing into the past to move fast on the promises for a bright future has invariably come to be an annual feature. Many soothsayers lend their voices. However, as the year is set to get dumped into history, not many seem to be jubilant over the happenings of the past 12 months.

Farmers in Andhra Pradesh, Telangana, Maharashtra and Punjab committed suicides in utter penury, groaning under heavy private debt. Parliament had two wash-out sessions, courtesy, the Congress, save just nine Bills passed by both the Houses.

All the major reforms, particularly the GST the game changer, are on back burner. Nature’s fury brought a major metropolis to ruble. El Nino caused havoc in several States turning the cool weather of the year into hot climate.

Discussions on climate changes, environment, containing terrorism carried an imprint of Indian view making history. Prime Minister Narendra Modi has created waves in international relations, but is moving on rocks in India.

Expenditure on defense and police modernisation has increased, yet civic protection is on thin edge. More chain snatchings, more ATM thefts, and money-on-call crimes, gold smuggling surfaced. Most of the States have been galvanising to digitisation to tame the corruption. Cyber crimes continue to show their ugly face robbing the institutions and individuals’ wallets.

Laws leave more for interpretation than for a conclusive ruling. Speed of justice is yet to roll out. The silver lining is that the judiciary has been able to gear up the administration to timely action responding to PILs pertaining to food security for the poor in situations of drought; asserting the domain of Right to Information Act in certain restricted areas and the like.

Inflation has been tamed. Indices maneuvered to project higher growth thanks to a statistical model. The alert finance regulator reasserted his commitment to growth-reduced interest rates. But amidst rising NPAs, credit markets are tepid. Volatility of capital markets amidst global concerns continued and the initial surge of investments has become timid.

Fed Rate hike as expected made its beginning as if the recession unwound. Yuan became the recognised third largest international currency. Amidst stable exchange reserves, the RBI is confident of holding the rupee range bound.

Amidst all these, India Inc posited a positive manufacturing growth. In spite of a slowdown in agricultural and services sector growth, the country is expected to grow around 7.5 percent this fiscal. Fiscal reforms are still in the boiling waters of the upper house in Parliament.

GDP and income poverty are commodity-centric and leave many ambiguities. Affluence is not assurance to happiness. Measured by human development index, the country is still at the bottom with a 137 standing among 188 nations that the UN assessed for 2015. Among the less happy BRICS, we are equals.

The promise of good governance by the present Union government is still in rudimentary stage as cooperative federalism has not yet displaced competitive populism among the states. Riparian issues in river waters among different states continue tensions. Water for the parching soils, safe drinking and industrial production requires a water budget as we have only 4% of the world’s water resource to feed 17% of the world’s population.

In a blissful but eventful development although K Chandrasekhar Rao and N Chandrababu Naidu went into no-holds-barred wordy warfare, the two showed maturity of purpose by letting bygone be bygones, shaking hands and visiting each other in a cordial atmosphere. Riparian water issues have come to a pause even as untimely rains and drought stare at the two States.

While Telangana placated all the religions with grant of spaces and structures and recognizing all the major festivals as State festivals, it also moved fast on digital map of India taking full advantage of the available cyber infrastructure and bejeweled the economy with a progressive industrial policy. But it got a directive to set up a Committee to inquire the issue of farmers’ suicides with a view to resolving the farmers’ economic security.

Andhra Pradesh has been moving from crisis to crisis – sand scams to call money scams and yet faster in implementation agenda on reforms has attracted the attention from global investors to build its capital while on its way to moving the administration to work from the temporary capital around Amaravati.

Fiscal extravagance has put both the states in search of grants from the Centre and loans from the public and international aid institutions. The future is getting brighter by the day.

Although the social welfare index moved up for the country as a whole, educational deprivation and malnutrition rates varied across states requiring a more cohesive, consummate and consensual approach to education and health access consistent with Constitutional commitment.

Can anemic health and education budgets be a thing of the past? I doubt. Privatisation is no solution to the ills of these sectors. Closely monitored investments of both human and physical resources from the governments offer more formidable solution. (The writer is an economist and risk management specialist. He served as Dean of Studies, ASCI)

By B Yerram Raju