Himachal budget backward looking


    The Himachal Pradesh budget presented by Chief Minister Virbhadra Singh and dubbed as “forward looking” by him is a misnomer. While it may be the impact of the drubbing, the Congress got in the recent Assembly elections in Punjab and Uttaranchal, the HP government’s decision to provide subsidies of more than Rs 100 crore cannot certainly be forward looking.

    It in fact is backward looking. For that matter Shanta Kumar, erstwhile Chief Minister of Himachal and the Union Minister for Civil Supplies had the vision to look ahead and bring down the subsidies. It did create a lot of hue and cry, however, the state has to provide the means to earn a living and not provide the living.

    Facts and figures come later. Freebies have no value in today’s world. Secondly, should subsidies be given when as slated in the budget itself, per capita income of Himachal Pradesh is expected to reach Rs 40,000 in the next financial year from Rs 30,138 in the last. Although that too can be negated by the fact that the state also has a high per capita debt of Rs 29,000 as per the last budget.

    The total loans of the government were likely to increase from Rs 17,484 crore in March 2006 to Rs 18,233 crore and to Rs 20,399 by the end of 2007-08. And approximately 25 per cent (about Rs 2,300 crore) of the entire budget of Rs 9684 crore, will come through SLR (statutory liquidity ratio) borrowings. SLR is that amount which a bank has to maintain in the form of cash, gold or approved securities. The highest outgo of 37 percent will be spent on salaries and pensions, followed by 28 percent on debt servicing and only 28 percent will be spent on development activities.

    So where does this all leave the government by the end of the term? These populist measures by the government cannot appease the people of Himachal any more. People of Himachal, who are self-sufficient would like to pay a Rupee more, provided they are given quality and service. The danger bells had been sounded by Punjab and Uttaranchal, and the Chief Minister had one-year to go and make up for the lost time. Instead, he’s come out with a populist budget, which may not appease the general public as such who do not come under the PDS (public distribution system). These generally would look for development – good roads, good public transportation system, good education, good environment, good housing, good agricultural practices, employment opportunities, and there are very few signs of budget allocated to these in the budget.

    Populist measures can be an eyewash and can work for a short time, and unfortunately for Singh, he has not days but months to go for the elections, and the public is bound to see through in the next 11 months. And unfortunately again, he won’t be able to up the populist measures in the last two three months of his term, with the media and opposition and the Election Commission keeping a strict vigil on his moves.

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    1. I don’t think there is any wrong in populist measures as long as it reaches the people and most importantly can win elections for a particular party. Punjab election result is the best example where Akalis promise of cheap ration has yielded results for them. The CM has just taken off the steam of the opposition in HP in case they were to employ the same tactics here. The opposition has to think on some other issues to confront the govt. Inflation seems to be coming down in the coming weeks and with harvest around the cornor the prices of essantial items will come down.

      There is no magic wand for this govt or any govt to pull up its resources and the state has to depend on Central assistance or by taking up loans. As long as people benefit from populist measures, there is no harm in populism. Scr*w the economics!

      Talking about Shanta Kumar as CM why has’nt the BJP involved him in state elections since his disastorous last term. The man is basically a confrontist and in his last term had annoyed all sections of society be it the farmers or employees or students. It will be a sucide for BJP if Shanta Kumar has anything to do in the next state elections. He may be a good writer and a human being but a dismisal administrator. Prof Dhumal has the ability to carry all sections of society together and most of all he is not authotarian which cannot be said about Shanta Kumar. As Central Minister Shanta Kumar resigned from Atal jis govt for reasons known to everyone.

      There is something for everone in this populist budget and the opposition will have to work overtime to change the tide in their favor and – we the people – have reserved best seats to watch the tamasha in next 11 months.

    2. Lets face it. Little bit of populism doesn’t do any harm if there is a larger good which in this case could be Congress winning the election again. It is different thing for us to sit in our comfortable houses and write our opinions on internet about populism, and it is entirely different when it comes to people in small towns and nondescript villages who are real voters, who slog in thier fams and who understand nothing about populism. The fact is that becuase of inflation, there is a growing price rise which has hit the common man and we will see some more populism fortunately or unfortunately for some time.

    3. I agree that inflation is pinching the common man. Yet, the government, especially the Central government has to take measures to check it. Populism efforts like subsides will only burden the exchequer and in the long run the burden falls back on the common man through indirect taxes.

      A common man feels the pinch when he is paying Rs 30 a kg for a tomato than Rs 10. Yet many won’t realise only, how the government mints money out through taxes directly and indirectly. We do not raise a voice against that as we realise only when we pay for it. Most of us do not know the complications of tax calculation and at the end of the year run to a CA to seek help. And when he calculates and finds that we are in a mess and we need to either invest in savings that are tax exempted or cough out the money.

      But yes, that ways the farmer may not be touched. He pays meagre tax. But they do get affected when the support price for their crop is not raised or raised marginally. However, the by-product of their crop like jams, jellies, pickles, juices or other things are sold at a higher price. So the chain goes on.

      Populist measures are a mere eye-wash and if we want to be pigeons that closes its eyes and feels that the cat is not seeing it, so be it.

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