Yashwant Sinha's critique of the Union Budget 2011-12

I had the good fortune of attending Swadeshi Research Institute's conference on the Union Budget 2011-12 at the Indian Chamber of Commerce, Kolkata. The chief-guest of the conference was Shri Yashwant Sinha, ex-finance Minister of India. Mr. Sinha while criticising the budget made several pertinent observations regarding India's miserable economic condition, poverty and unemployment which are worth reproducing so that Indians can be apprised of the sorry state of governance in India today.

• The share of the agricultural sector in our GDP today is 15%, down from 35% in 1951. It is sad to note that there is loopsided growth in India, where the services sector and manufacturing sector are doing well but the agricultural sector, which is extremely essential for the development of over 60% of our population has not been given due importance.

• While many take pride in announcing our growth rate to be over 8% and double-digit projected growth rates, such figures are useless until and unless there is inclusive growth (with attention to all sectors of the economy and all segments of the society) and stability in prices.
  

• India has a miserable negative balance of payment (exports minus imports) of U.S. $ 100 billion. The situation is as bad as the pre-1991 period.

• The fiscal deficit announced in the budget an alarming 5.7% of our GDP or over Rs. 4 lakh crore rupees (which is much higher than the estimated deficit). It is sad to note that instead of using effective measures to use the available resources, the government has remained a silent spectator to ineffecient use of resources, plundering of money by way of corruption and non-implementation of schemes.
  

• There has been no effort to curb inefficient use of resources or corruption. in this season of scams, lakhs of crores have been amassed by politicians and bureaucrats. This has led to a drainage of resources, which has reduced the governments ability to fund social welfare programmes. The government has also not taken any effective measures to put a stop to black money, money-laundering and tax-evasion activities. No effort has been made to bring back the huge amounts of black-money lying in tax-havens. This has caused a tremendous loss to the government exchequer. (The current quality situation in India can actually be compared to that of the Muslim invaders like Mahmud of Ghazni and Timur who plundered wealth from India. Similarly, UPA politicians seem to make the most of the fact that people have given them the responsibility of running the government and they are busy plundering national wealth and depositing them in tax-havens as if there is no tomorrow).
  

• While the government has announced fertilizer and LPG subsidies, it will hardly benefit poor landless-farmers who neither have land nor access to LPG stoves.
  

• Though the government has been extremely good in announcing grand schemes, most of the schemes are hardly implemented and the benefits never reach the people for whom it was intended. There are more than 250 schemes, but not many material improvements in the rural infrastructure.
  

• There has been almost no increase in the per-capita consumption of electricity in the past few years in India and many parts of India still do not have access to electricity. Even areas having access to electricity are facing power-cuts and shortages.

• The unemployment rate has increased in the UPA regime, from 8.3% in 2004-05 to 9.5% in 2009-10.

• The country is facing an extremely high-rate of inflation and the exponential increase in food prices has made it almost impossible for the middle class to survive.

• The budget has also not made any effort to reduce poverty. There are several million people below poverty line and the number has been increasing. There has been a failure in the functioning of the Public Distribution System (PDS) and several loop-holes in the NREGA.
  

• The budget has also not made any provisions for women in terms of higher exemption for income-tax and other subsidies at a time when women are facing discrimination and oppression.

Mr. Sinha also suggested practical and constructive steps in improving India's economic position and indicated that proper governance and is the key to making India an economic superpower.