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Indian Budget 2010 : Back To Basics

Indian Budget 2010 : Back To Basics

February 08, 2010

With critical issues requiring real change, is it time the government got back to basics instead of sound-good soundbites?

It’s that time of the year when Industry bodies and India Inc present their wish lists to the Finance Minister as he gets set to present his annual budget. It is a keenly anticipated event for news channels and the national press, replete with round table discussions and post mortem analyses on the hits and misses. Editors and economists get into the nitty gritty of taxes, policy reform and growth targets and discuss how the markets will react to the announcements in the budget. For the government itself, it is more often than not a PR exercise, a chance to show the country what they have achieved and what they plan to do. But amid all this rhetoric, the media often tends to forget whether the real issues are being addressed, and whether things on the ground have changed for the common man vis a vis the last year or the year before that.

So to move away from the regular format, last year my editor at Bloomberg UTV suggested we do something different. Leave the rhetoric behind in the studios and go on the ground to find out just where we stand on the basic issues that bother us every day. Issues like food, water, sanitation, infrastructure, education, healthcare etc. After all, these are the things that really matter to the common man, not the fine print on second generation reforms or extension of excise duties to industries. At the outset it looked as if we would be tackling motherhood problems and it would turn into yet another ramble on how bad things are, but quite to the contrary, it was an interesting exercise for anyone wanting to explore the large scale systemic problems a country like India faces. The statistics are alarming and the reality depressing.

Let’s take education, for instance, to illustrate just how government after government has failed in its promise to improve things. For years, the centre has been steadily increasing its outlays on education, but still the gross enrolment ratio in higher education is not even half that of the developed world. And what’s surprising is that despite a sum total of 20,000 colleges up and running in the country, report after report suggests that 40-50% of graduates in India are unemployable and lack the basic skills needed to enter the workforce. Even UNESCO has ranked India the lowest among BRIC nations in terms of expenditure on higher education per student.

Of course one could argue that we have premier institutions like the IITs and IIMs, but the fact remains that the overall quality of our colleges and universities leaves a lot to be desired. No wonder then that over 4,50,000 Indian students go abroad every year to study. That’s an outflow of $13 billion every year, enough to create 20 IITs annually.

I could give statistic after statistic on how every aspect of our existence is affected because of the systemic problems that have been left unaddressed. (India’s annual food wastage due to the lack of adequate warehousing facilities, for instance, is enough to feed the population of Japan; it takes 527 days to obtain a license to do business in the city of Ranchi vs. 2 days in Australia) But the fact is, it is these basic problems in India that are going to be the biggest impediment to growth even as we make big headway in every field.

In fact, as the West grapples with an economic recession where low growth rates and stagnation threaten to prolong the crisis, every Indian industrialist you speak to says it is the opposite for India – not low growth but niggling issues like these that are going to be the big worry for us as we march towards becoming an economic super power. Crumbling infrastructure, lack of adequate manpower and massive red tape are the top 3 concerns on every industrialist’s wish list. Just last month, in fact, UK steel magnate L N Mittal made his displeasure vocal about the slow pace of progress of his projects in India.

At the end of it, with a clear mandate and some very experienced leaders at the helm, everyone says India’s time is now and the government should seize this opportunity to address these problems. After all, announcing big ticket reforms and grandiose plans for growth wouldn’t yield much success if the basic wherewithal to support this growth is missing.

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