An Open Letter to Modi
Prime Minister designate Narendra Modi inherits bad governance; almost empty treasury as the UPA-FM has drawn in advance all the dividends of the PSUs six months in advance (2014-15 first half) to arrive at the magic figure of fiscal deficit of 4.5 percent promised by him; inflationary economy contributed by more the supply side factors; lowest growth of manufacturing sector continuing for the preceding two quarters; the burden of Food Security Act and the MNREGS to which the BJP is also a party; chaotic primary education to higher education; scamsters sitting right in front of him in the Parliament benches; election promises of the NDA partners hitting the roof and unnerving agriculture sector. At the moment, on the external front, the issues do not pose urgency.
Budget formulation in the wake of division of the State of Andhra Pradesh poses another major challenge. His hopes are in the youth that ascended him to power; women who have put tremendous faith in his promise of a safe walk in midnight even; and a corporate sector willing to lend him a helping hand. He has a strong central bank to lend support to sensible fiscal policies. Sixty eight laws waiting in the Parliament thus far, lapse. A new genre of economic and financial reforms requires to be put in place. Politically, the NDA partners would like accommodative policies. UPA still having its majority in the Upper House has potential to come in the way of speed of action. Fortunately, we are a nation with enormous intellect to find solutions to most of the ills plaguing the economy. Sorting out short term and long term issues and setting priorities in a chaos is difficult but has to be done. People who joined him with a hope to grab power and he knows who they are, should be kept at a distance through negotiation and tact that he has in abundance.
Priority obviously is governance and this starts with the fragile bureaucracy. Corruption has become a way of life and therefore difficult to tackle in one go. Nevertheless message has to go that it would not be tolerated. Rebuilding trust in honest and sincere bureaucrats would require insulating them for decisions taken in good faith and without negligence. Cleansing the corridors of power starts from the PMO, Ministries of Finance, Corporate Affairs and Industry and Commerce. It is advisable to set up an empowered Ethics Committee to take stock and act briskly. This should be chaired by the Union Minister of Home. Let the errand be punished first if the Ethics Committee finds immediate ground for action. If such persons would like to take the government to Courts, let the Government’s advocates take the cases forward.
Second in line is Education. Primary to higher secondary education has been experimented upon with no one to face the consequences of failure. The cultural fabric of the nation is on the brink of collapse. Universal primary education demands the Canadian model to be followed. According to this model, all the primary schools have to admit children within radius of 5km in different classes. All the students residing within 2km distance are not entitled to school bus. All those who opt for the school bus have to purchase the bus pass. All these schools have their own libraries and the students have to buy only work books. There is no distinction between the rich and the poor; nationality and religion. No donations and no public schools of the nature that we see in India exist. Whether Prime Minister’s son or peon’s son, he has to study in the same school if they are within the command area of the school. There shall be no primary or secondary school without a playground. The schools commence at 9a.m with a prayer and national anthem and end up at 3p.m. Once in a week the meal is provided by the school most hygienically prepared. Rest of the days the students get their packed food. There will be one break at 11.30 for 45minutes when they can play around in-door or out-door games depending on the weather. They will have a lunch break at 1.30p.m again for 45 minutes. The parents have to provide the standard note books and tools like the geometry box or calculators etc and should promptly respond to the call of the teacher whenever required to check the ward. The whole curriculum deals with the essentials – culture; history, geography, basic sciences and mathematics and sports. All the students are provided grades duly notified to the parents. All students would be subject to health check up regularly. There is no school fees or donation. Admission is accorded at the rate of 24 students in a section. The Student: Teacher ratio is 1:15-20 and the class teacher is held responsible for the performance of the students. Although primary education falls within the State domain, Union Government should take the initiative to usher in reforms in this area by opening a dialogue with the State Governments. This would lay a good foundation for the next generation.
The Higher Secondary Education should follow suit. There will be no policy of reservations in any school as the school education is universal. The Budget for education sector should be 6 percent of the total outlay for the next five years in each State that should go for bringing about improvement in the school buildings and environment. Several schools – 80 percent of them and more so in rural areas- do not have roof and where it existed it is with cracks and leaks profusely in rainy season. There are no clean toilets and well maintained play grounds. There are no benches, white panel boards and market pens. If all these exist by chance, there are no qualified teachers. Teacher posts should be filled by merit and not by caste reservations. Budgetary grants for schools should be released well in time so that the teachers’ salaries never, never get delayed. They should have proper social security when alone the teachers would be able to devote their energies towards building a new generation with good values and culture.
In line comes the farm sector. This is again a concurrent subject. The Union Government would do well to retain only Research and Development in its fold and leave the rest to the State Governments to handle. The State Governments on their part should devote their attention to extension, timely input supply and market support. Budget allocation for this sector should scale up from the current measly 2 percent or less to at least 4 percent of the total outlay. The target for the State Governments should be suicide-free farming sector. Crop planning, minimum support prices, crop and weather insurance should all move to the State Government domain. The Union Government should only be a coordination agency where required.
In view of the large number of rivers flowing across the States it is important that the Union Government should enact a suitable Law to protect the water rights and with the power of resolution resting with the Tribunals set up under such Law. Recourse to Courts shall be the last resort and in any case the State Governments should resist the temptation to be the petitioners. Arbitration mechanism should be fully explored for quick resolution of any disputes on such account.
In order that employment target of 10lakhs per annum is realised, it is important that the structural transformation of the rural economy should evolve without migration of labour to the urban areas. Each District should have a Rural Industrial Estate. The Industrial plots should be 1000-2000 sq.yds with water, power and drainage facilities fully provided. Since land prices have soared to unaffordable prices, such plots should be made available to the rural entrepreneurs on leasehold basis for ten years renewable for another ten years or outright sale in easy instalments with alienable leasehold rights in favour of financial institutions in order to access credit easily. These Rural Industrial Estates should have within a radial distance of 5km multi-storeyed residential complexes under PPP mode. There should be tripartite agreement between the owners of the rural industrial enterprises and the builders and workers for allotment of flats on lease basis for workers so that recovering rent would not pose problems. These RIEs would have testing laboratories, quality certification and packaging units, labelling and branding facilities within the easy reach of enterprises and they would be linked to the logistics hubs in the nearby urban and metro centres. Goods carriers and tempo operators would also be drawn from the rural work force.
Enactment of Bankruptcy Law and Exit policy do not brook any delay.
Critical Infrastructure being power, water and transport – road, rail, sea and air – has to be brought in with heavy infusion of capital from specific development finance institutions with participation from World Bank, ADB and the like. The commercial banks mobilising short term resources cannot afford the luxury of lending for long term projects if we were to go by their experience thus far and keep their hopes on government for refurbishing capital.
Urban and metro centres will have the logistic facilities and market facilitation centres for providing easy access to both domestic and international markets. The growth of service sector can peak to 60 percent and manufacturing sector can reach 25 percent in the next five years. The farm sector would retain its share of 15 percent. This facilitates the growth of the economy at a sustained rate of 9-10 percent within five years. If these happen people would be the winners and the vanquished without mending their ways would have to sigh in despair. Long live the Indian democracy.
Published in EENADU of 20.05.14