Disrespect to Verghese Kurien and National Milk Day
Editor,
National Milk Day is celebrated every year in India on November 26 to mark the Birth Anniversary of the father of the White Revolution in India, the legendary Dr Verghese Kurien. Because of the untiring efforts of Dr Kurien and his leadership, India achieved self-sufficiency in milk production, and brand Amul was created. Millions of farmers and their families have benefitted just because of the herculean task he initiated in 1960s.
However, it is dismaying and disheartening to find that, in the last few days, almost the entire G.S. Road in Guwahati is lined up with posters of the Ministers of the Union and State Governments in the name of the ensuing National Milk Day on November 26. This is total disrespect to the very man on whose Birth Anniversary, the National Milk Day is observed. There is NOT a single acknowledgement anywhere about Dr Kurien. Ministers seem to have usurped the very deeds of the great son of India.
Yours etc.,
D Bhutia,
Guwahati
Freebies can kill the economy
Editor,
Argentina elects Javier Milie as President and he has clearly stated that he would not provide any freebies or subsidies. He got 56% of votes and defeated his rival who had promised a slew of freebies and complete removal of income tax. Argentina has been enjoying freebies and subsidies for a long time and inflation in the country is at 143%. The Argentinians ultimately had better sense after 40 years of mad rule of freebies.
We have already seen the collapse of the Sri Lankan economy due to freebies. The other name for freebies is ‘Disaster,’ which is well suited to Sri Lanka. But this is also a warning to all countries, including India where politicians are in a race to dole out freebies only to gain political mileage. Presently the news floating around is that the Modi Government may adopt the old pension scheme and if it happens it can prove to be an economic disaster for the country as per the opinion of various economists.
While elections are the foundation for democracy, presently every election is being used to declare freebies, whether or not those promises can be fulfilled. For example the AAP party had declared before the election in Punjab that Rs 1000 would be paid to every woman. But that remains an unfulfilled promise even after being in power for the last 18 months. Announcements of various freebies, including cash transfers to women, farmers, students and sometimes minorities and weaker sections, free electricity, free water, free travel for women etc., has now become a common phenomenon. Every party is busy declaring freebies in their efforts to woo the voters.
In such a situation, it is a matter of concern, whether this is a healthy trend for our democracy. Will our governments be able to fund these free schemes? Will the debt burden on state governments increase with freebies? What impact will these free schemes have on essential government expenditure on health, education and infrastructure.? These questions are of paramount importance. In many countries of the world, there are examples of government debt increasing due to freebies and many countries have been ruined due to the same. Examples from Venezuela and Sri Lanka show that even reasonably rich countries can face disaster due to freebies, not to speak of poorer countries like Pakistan.
Some time ago, the Reserve Bank of India and the Comptroller and Auditor General of India (CAG)had published data in their respective reports about increasing debt of the states due to freebies and have expressed concern over these freebie schemes and rising debt burden of the states.
We have to understand that India is a union of states, hence the debts of both the Central and State Government together are considered as the overall debt of the Government. While on the one hand the central government has succeeded in reducing its debt which had crossed 60 percent of the gross domestic product (GDP) during the Covid19 years, to 55.5 percent in 2022; the debt of various state governments has continuously been increasing in proportion to the state GDP. According to the assessment of CAG, the debt is higher in states where higher amounts are spent on free schemes. Punjab and Andhra Pradesh top the list where a huge part of the total revenue is spent on free schemes. Apart from Andhra Pradesh, Tamil Nadu is another state in the south which spends hugely on freebies
When states spend such a large proportion of tax revenue on free schemes, not only would capital expenditure on infrastructure go down due to increasing debt of the state governments but social services like education and health as well as transport and other essential services will also be impacted. For the development of any state, it is imperative to increase investment in infrastructure. Hence it is necessary to speed up the development of the country by curbing free schemes offered by the states as well as the central government.
Due to increasing debt burden the economic rating of the country is getting impacted. If this continues, our country will not only have difficulty in getting new investments but our companies and government will also have to pay higher rates of interest on borrowings from foreign countries. Increasing debt burden not only creates fiscal imbalance, but is also affecting the ability of state governments to run welfare schemes and is also blocking the path for the development of the country and industry in particular.
According to the Fiscal Responsibility and Budget Management (FRBM)Act, the target debt-GSDP (Gross State Domestic Product) ratio, in any state, should not exceed 20 percent. But as per CAG, in most of the states this ratio is much more than the target. CAG also reported that the debt of the states is continuously increasing compared to the target ratio. This is a matter of concern not only for these states but also for the entire country.
There is an urgent need to take appropriate steps to ensure that political parties do not put the country in jeopardy for their narrow political gains. Due to political reasons, the legislature and executive will not address this issue but other pillars of our democracy like the judiciary and media will have to come forward in opposing freebies.
Yours etc.,
Yash Pal Ralhan,
Via email