The Alternative Budget

The biggest concern that comes to my mind when I think of the budget is the shameful neglect of the agriculture sector, farmers and the poor by the Government of India, by successive finance ministers of the country, though they all regularly pay lip service to their cause. This alternative budget is genuinely dedicated to India, and its masses – the poor.

In the Union Budget presented for 2010-11, the Finance Minister Pranab Mukherjee had allocated a total of Rs. 12,836 crore – up from Rs. 10,527 crore in 2009-10 – for agriculture, allied activities and irrigation. Add that fancy term ‘rural development’ and you get a total Budget allocation of about Rs. 67,000 crore. That is less than 15% of the total funds allocated by the Finance Minister in 2010-11. And this is despite the stated concern of the UPA government about the distress being faced by rural India, which is the real India. Rural India needs 150 million jobs to be created. As a committed government, our aim should be to do this in a span of 5 years and not 65 years. Thus, we have to create 30 million jobs a year. In rural India, a job still can be created by investing about Rs. 33,750 per job. This would mean the necessity for an additional Rs. I,00,000 crore per year. In my Alternative Budget therefore, firstly, I would increase the allocation for the rural Indian – mainly farmers – by a straightforward Rs 100,000 crore a year. Half of the money would be invested every year towards improving physical infrastructure in rural India, including effective irrigation facilities, better and functional roads, a vast network of cold storages and regular supply of electricity. The other half would be every year invested towards improving social infrastructure in rural India – including much better access to education, health and sanitation. The first would lead to a dramatic improvement in productivity in rural India and result into vastly superior income levels for farmers. The second would lead to a dramatic improvement in human development indicators in rural India. And both will create jobs, removing the massive rural unemployment from India.

Poor in India live in cities too. So I would suggest another Rs. 1,20,000 crores to be allocated for 25 million jobs to be created for the urban unemployed. In urban India, the cost of creating a job dramatically multiplies to about Rs. 2,40,000 per head. Thus, to create 5 million jobs per year, we would require the amount I just mentioned.

The urban poor need another thing apart from employment. They need dignity of existence so that another Slumdog Millionaire is not made on India by Western imperialists. For that, we need to budget another additional Rs. 24,000 crore per year for five years to create 15 million urban flats of minimum 250 sq feet each.

I also want to focus on one burning issue of this year though it doesn’t directly relate to the poor alone. Corruption. And the only and only solution for corruption is a functional judicial system. Corruption and greed are globally prevalent, yet it touches far less lives in the USA than in India simply because the American judicial system is functional and ours is dysfunctional. In America, they have ten times more judges per million people than in India. If we are to try and achieve such standards, we need to have about 1,00,000 more judges. It sounds huge but is surely achievable again in a span of five years. And to have 20,000 additional judges per year, we have to budget for approximately Rs. 6,000 crores per year additionally assuming that the expenses around a judge and his office assistants put together is definitely not more than Rs. 30,00,000 per year.

Thus the total additional funds required is about Rs. 2,50,000 cr. First and foremost, these funds should have been made available from our existing budget of more than Rs. 6,00,000 crores since it pertains to 85% Indians. Secondly a huge amount of these funds will come from duplication of allocation in various schemes like NREGA etc. However I will assume the government is not willing to do so and the entire fund has to be generated through new sources. So how do we do that?

How the Future Will Arrive

I will firstly suggest just one very simple and long overdue revenue raising proposal – just do away with the subsidies on LPG, kerosene and diesel. They have led to huge distortions in the economy and have absolutely not benefited the so called beneficiaries for whom the subsidies were allegedly meant. Rather, you have cases where honest officials are being burnt alive when they have tried to stop the theft of subsidized kerosene. In 2010-11, the combined subsidy for all three would amount to a little less than Rs. 100,000 crore. As simple as that. Just one decision from Pranab Da after consultations with Sonia Gandhi and Manmohan Singh could make it happen.

The second source I will suggest is legalizing all the black money stashed abroad by giving a simple 10% tax offer, payable in five equal installments of a mere 2% each! But all this with two key riders. First, that the government will take genuine steps to recover the money stashed abroad and all black money recovered after one year will be nationalized. And second, that there will be measures in place to ensure that future generation of black money becomes almost impossible. And of course, with a functional judiciary. With something as high as an estimated Rs. 75,00,000 crores stashed abroad, this will lead us to a huge new revenue stream of a minimum of Rs.7,50,000 crore in five years – or Rs. 1,50,000 crore per year, making up for the balance required to put my proposals into action.

At the end, all I would like to say is that no one can deny that the Indian farmer and poor too need to share in the spoils of globalization. What happens if farm productivity in India touches the level of China and poor start getting purchasing power? The truth of it all is that in the real sense, it is also going to benefit the corporate sector immensely. For, once the poor have purchasing power, it is the corporate sector which will reap the benefits like how the Chinese corporations have been getting advantaged.

The real question is: will our system make an effort to go back to the Do Dooni Chaar ways or stick with the current obsession with Do Dooni Paanch?

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