Monday, March 29, 2010

Girija Prasad Koirala: Architect of Democratic Nepal

A man who grew up under the visionary mentorship of father Krishna Prasad Koirala, and later elder brother Bishwesar Prasad Koirala {BPK}have played very pivotal role in the crucial political development of Nepal that’s span ranging almost for six long decades. Girija Prasad Koirala {GPK}, through his stout democratic vision and its execution, secured for himself a position that was never been a streamed precedence in Nepali politics-that towering stature in national politics also imparted him an inevitable crucial position in entire South Asian region.
Through his stellar performances, with maintaining steadfast attitude in his working style, he truly secured a position in Nepal’s politics that makes even his ardent critics unviable to completely staring him out from any political developments in last six decades.

This tallest figure of Nepalese politics was the youngest of the six children of Krishna Prasad Koirala and Divya Koirala-he was born in Birpur{Saharsa, North Bihar} in 1924 and later moved to Varanasi where his family was compelled to settle down and keep their struggle alive against the Rana regime in exile; city of Varanasi indeed appeared as a safe camouflage for them-there the Koirala’s grew up, studied and started sharing great bonds with the contemporary Indian politics which was entirely focused independence struggle.
The time was of ripe unrest in both the country that was sensed very well by visionary B.P.koirala and made endeavor for wider democratic activism in the region-it wouldn’t be an exaggeration, if his participation in Quit India Movement in 1942 and three years imprisonment for the cause of Indian independence may be regarded as peak of co-operation between two neighboring country. He succeeded enough here to mobiles Indian support to overthrow Rana regime {1846-1950} in 1950 and subsequently reached to a very comprehensive Delhi Agreement with the help of Indian interlocution led by Pandit Jawaharlal Nehru.

Apart from many significant moves, this treaty made way forward for parliamentary democracy in Nepal-that was genesis of democracy as an idea in the Himalayan Kingdom and naturally pioneering have been started from the Koirala’s. Although Shah Regime didn’t resolute their pledge until 1958, when the first Parliamentary elections was convened under its patriarch, B.P.Koirala who further won the majority to rule-he became the first Prime Minister of Nepal albeit couldn’t prolong it in the wake of dissolution of democracy by the King Mahendra.
The next thirty years remained the struggle phase for democratic maneuverings-being the supreme rank of opposition, B.P.Koirala had to face the ire of Monarchy; he was imprisoned for eight years to contain the democratic move by Nepali Congress. This period of adverseness bestowed upon young brothers-Matrika Prasad Koirala and Girija Prasad Koirala to play key organizational leadership-death of B.P.Koirala in 1982, further maximized the potential for Girija Prasad Koirala in next order of politics in Nepal.

Indeed GPK shown his great capacity as successor of his family values-his father, a follower of Mahatma Gandhi, who died in imprisonment for his pro-democracy convictions and later elder brother, B.P Koirala’s life long commitment for socialism and non-alignment infused in him a great taste of democracy and relentless struggle for its materialization. Since the inception of Nepali Congress in 1947 {at Varanasi, India} by the exiled Nepali political activists, he remained a profound voice within the party and indulged himself even in illicit act like hijacking a Plane and printing of fake Indian currency to assist the violent revolution for democracy in 1970’s but on the twilight of the decade, Nepali Congress moved for peaceful means which also reduced the reason of illicitness.
He must be given maximum credit for endowing Nepali Congress, a principal for parliamentary democracy with place for constitutional Monarchy-probably, such shrewd tracts with mix of pragmatism empowered him to serve as Prime Minister for record five times albeit without completing the entire tenure.

Strong stuckness with power also led him for lot of criticism that especially derived from his autocratic manner in party line, corruption and in last phase of his overt nepotism to back his unpopular daughter Sujata Koirala who is now the deputy Prime Minister and Foreign Minister in present government. For personnel rise too, he deftly sidelined the two measure force of Nepali Congress-Ganesh Man Singh and Krishna Prasad Bhattarai after the restoration of democracy in 1991; Nepali Congress won the majority and he as a top choice became the Prime Minister.
Though his tectonic shift from a rebellion and a Trade Union leader {In early phase of career, Birgunj}to top legislative representative didn’t happened without compromising on ideological and ethical front-throughout his stint, he maintained one-man domination in party by applying marginalization of senior leaders and promoting nepotism. Corruption was on all time high during his first three years in Prime Minister Office which fetched him stout criticism and condition of resignation; such initiation was indeed very unfortunate for the democratic foundation of Nepal.

Anyway, he remained unconvinced through all these developments and kept working as a maverick in Nepali politics-he played a well choreographed role during the decade long Maoist insurgency and transition of Royal rule; his next stint as PM between 1998 and 2000 was very crucial from contemporary perspective. His pragmatic role after the unfortunate Royal Massacre in 2001 and later in 2002, when King Gyanendra dismissed a democratic government, submitting power to loyal nominees couldn’t deter his systematic resoluteness for power. In2003, like a true leader, initiated contact with the underground Maoist rebels and further fall of the 2005 deadline given by the King for executive power led the seven parties to signing the 12-point agreement {In Delhi, November 2005, with the Indian help}that stroked the historic people’s movement of April2006.
After the peoples movement, 240 years old Royal rule was collapsed in2008; now Koirala again had to play a pivotal role to track the country’s back to peace and development as Prime Minister albeit it was not materialized in proper manner-indeed this phase was peak in his career except a single unfulfilled dream left, to be the first President of “Republic of Nepal” due to expected spat with Maoists. He drafted a mix fortune for Nepali Congress in his life time where he led Nepali Congress to the peak but couldn’t succeeded to prepare a second tier leadership which now haunting the party very dearly besides on many macro policies, he failed to led Nepal towards out of corruption, instability, economic and other social deprivations. Despite some odds, whenever this giant of Nepali politics stood in his Daura-Suruwal, he always appeared as a voice of nation and very much synonymous with the democracy. Indeed passing of Girija Prasad Koirala marks an end of era-both in Nepal and subcontinental politics.
Atul Kumar Thakur
March24th2010 {Wednesday}
New Delhi

Why Kanu Sanyal’s Suicide Matters!

Like any normal day, I awoke on March 24th with having the set of newspapers before me-scanned first, THE HINDU, than The Indian EXPRESS and lastly The Economic Times to judge the authenticity of a rude shock that Kanu Sanyal opted for suicide as his last panacea. How shocking and odd was that sudden strucking with the news of his hanging in his office at Hatinghisha village near Silliguri-some distance away from his home {Sephtulajote} indeed marks tragic end to last of Naxalbari trinity after Charu Majumdar and Jagal Santhal. Charu Majumdar died in police custody in 1972 during the peak of Naxalbari movement in major eastern states-he was an elite face of movement while Kanu and Jagal was the real mobilizer which Charu himself used to admit in his lifetime. Though through sporadic state led developmental intervention, lot of things have changed in these hilly areas of Northern Bengal but in 1967, it was dominantly a rural landscape, where a tribal youth named Bimal Kisan obtained a judicial order to plough his land but that was stiffly challenged by the landlords-from March to May {1967}, conflict between feudal interest and the tribal access to land remained rampant.

Moreover, circumstances adversely engraved on May25, 1967 in a village known as Prasdujot and not from Naxalbari as it commonly known as-a police was killed in violence on May 24th, which next day tolled the eleven innocent {unarmed} lives including of eight women’s and two toddler. Kanu Sanyal along with Jagal Santhal had led the land to tiller movement under the CPI {Marxist}’s Darjeeling committee-Jagal was also a candidate of CPI {M} in State Assembly election of February 1967, but he lost the election theirs legislative quest halted on midway. Complexities of Naxal movement was way ahead now-Kanu Sanyal as front leader instead to influence the people’s mind about the existing juxtaposed reality chosen a very confused international route to broaden their impact in Indian condition. Kanu visited China in late sixties and met with Mao that prompted by the Beijing Radio and Peoples Daily as “Spring Thunder”-like the disastrous projection, Naxal movement suffered a complete setback with expected split among the cadres.The All-India C-ordination Committee of Communist Revolutionaries {AICCCR} was formed in 1967 and broke away from its parent party-CPI {m}; stress was laid on armed insurrection and the denunciation of electoral politics.

Further on April 22,1969 {Lenin’s birthday}, the CPI{M-L} was formed and the AICCCR merged with the newly created CPI{M-L}although within short while factionalism got momentum with separation of Andhra cadres-the best practices couldn’t be placed on time that compelled the entire Communist movement in India to be fall apart. Ironically, Kanu too suffered from the same ire of factionalism and never accepted as an ideologue within the party in true sense-however he made efforts to falsify the opponents malice; in 1969, he submitted a comprehensive “Report on the Peasant Movement in the Tribal Region “which later renamed as “The Causes and Nature of Current Agrarian Transitions” and freely circulated before its publication from Oxford University Press {OUP} in 1986 {edited by A.R.Desai}.Kanu as true torch bearer was focused on tribal and local issues unlike the urban centric, Charu Majumdar, Mahadeb Mukherjee, Saroj Dutt etc-such concern initially fetched the huge respect of common men’s but alas! That intra-party proved disastrous in their optimum streamlining.

In1967, Kanu was arrested for the Parvatipuram {Srikakulam} conspiracy case, he spent next seven years in imprisonment before Jyoti Basu’s personnel intervention worked in his acquittal in 1977, this phase besides Charu’s death in 1972 completely changed his perspective as he was now in favour of mainstreaming of Naxal movement on democratic line. Out of Jail, he formed the “Organizing Committee of Communist Revolutionaries” which became the “Communist Organization of India {M-L} in 1985 and in 2003, the CPI {M-L, Unity Initiative}, that was based on the democratic model of his own Terai report. In true introspection, Kanu Sanyal’s vision is still relevant as it was forty –three years back, only missing is a meticulous choreography of idea and action under the canopy of pragmatism. Systemic failure in radical movements aroused from organizational discontents and frisking away from peoples issue that consistently eroded the mass base for these movements. Kanu Sanyal’s reclusiveness and his option of suicide is indeed a defeat for those who still believe in collective effort to shape the history in just way!
Atul Kumar Thakur
March24th,2010 {Wednesday}
New Delhi

Pablo Neruda and India

Pablo Neruda,Communist with ideas and a poet, diplomat and humanist by deeds was among the most profound voice of twentieth century-this great man from Chile have been always supported the cause of freedom and justice throughout his life and succeeded in unprecedented way in his prolific inter-cultural activities. In 1927, Neruda became the Chilean Counsel in Rangoon and spent next five years in the eastern countries that infused in him a concern for repressive colonialism in Indian Sub-continent; obviously as an ardent revolutionary, he stood with the Indian Freedom Movement and participated in A.I.C.C meeting in Kolkata {1928}. That was a chunk of gesture from him for Indian Freedom Movement albeit he did much more covertly for that historic struggle-his next visit almost took twenty two years later, when he arrived in India in 1950, the condition was entirely changed since it was now an independent nation.

Alas! Than the world politics was on the crest of lethal ideological encampment and being revolutionary were indeed used to possess a far reaching effect-so, circumstances in that phase, have compelled him to led an exiled life in Europe albeit that didn’t restrain him to be a leading name during the cold war year.He awarded with Noble peace prize for his initiatives for peace-non-alignment was a fascinating interference for him besides he had great vision for close India-U.S.S.R ties for balancing the power equation in world politics. He often called a “Soldier of Peace” for his die-hard commitments for peace and ends of ideological monopoly-knowing his temptation, famous French Scientist Juliat Coori induced him for visiting India and meeting with Nehru for tracing the ground of peace movement during the high intensity of cold war. Scientist C.V.Raman was the next person to met but before that he stuck through a terrible frisking exercise at the Mumbai Airport by Custom and Police officials-a witness of freedom movement received with such humiliating treatment in the hands of officials who treated him as a suspect and worst even, his Passport and Shoes were not spared to be ceased.

Anyhow, he managed to enter in his destined Hotel-later had a meeting with Vijaya Lakshami Pandit and received assurance for world peace movement. Further, he came to Delhi-had meeting with different groups-like of Writers, Philosophers, and Artists etc-that was the only solace for him in that visit. But his euphoria suddenly disappeared when he was called on dinner by the Ambassador of Chile, Juan Marin- he informed him about the apprehensive concern of Indian government regarding his activities.Despite such stodgy advances, he remained patient enough and moved for a meeting with Nehru in his office-he warmly reminded him about their previous meeting, yet he received a cold approval; next, he given the Juliat Coori’s later to him and asked about his message-Nehru’s next sleepy reply was “I will answer to this letter”. The only less dry proposal from Nehru was-What can I do for you? Against the nature, hurt Neruda replied that visiting monuments of splendid Tajmahal was on my wish list but now returning to Europe from first possible flight is my only priority.Although when he backed to Hotel, officials informed him about the state sponsored trip for Agra but it was too late till than-after sixty year of his last visit, it still haunts, why a cultured person like Nehru shown such dry gestures for a great visionary? Might be, he was passing through a very rough physical, political or emotional phase but in no way, it was justifiable! It was stoutly unfair to treat Pablo Neruda on the basis of contemporary communist movement in India.

Despite such bad and scratchy experience during last visit to India, Neruda surprisingly voted for Nehru as a member of panel in “Lenin Peace Prize” only five years later…indeed he succeeded as a great visionary and well wisher of Indian causes by broadly ignoring the stodgy treatment of last visit. Nehru’s treatments for Neruda were emerged from the internal feud between Indian state and confused Communist movement…whatever was the reason, it was inappropriate from both the diplomatic as well as personnel standard. A nation like India which has shaped on a historical legacy of great courtesy for its well wisher, probably lost a ground in the case of Neruda albeit he as a person and a poet have secured a permanent place in Indian peoples mind and heart which is a true respect for him and his bond for India… of course, Pablo Neruda was aware about that bright side from his loving India.
Atul Kumar Thakur
March24th2010 {Wednesday}
New Delhi

Michael Foot: A Progressive Democrat

A leader with principle who held the baton of labour party unified in the early 1980’s and a writer dedicated to the cause of freedom died recently at the age of eighty-six; this man had friend all over the world and India particularly remained a permanent concern for him. Michael Foot was a keen admirer of Nehru, he had first meeting with him in 1938-that was arranged by V.K. Krishna Menon; meeting with Nehru left him convinced for Indian independence, he joined the Indian League and became a stout supporter of India’s Freedom Movement.
Than as an editor of the left wing newspaper, “Tribune”-he was unsparing of the British Raj-in later period too, he kept supporting the Indian cause on Kashmir even amidst the heavy opposition from Labour party in Britain.Michael Mackintosh Foot-the mid name was added from his Scottish mother’s maiden name, he was the fifth of seven children of the phenomenon man, Issac Foot, a solicitor by profession and an avid collector of 50,000 valuable books-later he also served as Lord Mayor of Plymouth and liberal M.P for two short stint besides remaining an ardent Methodist and temperance campaigner.

Young Michael Foot was educated at Leighton Park in Reading {Berkshire} and later at Wadham College {Oxford} in classics-with his growing intellect, very soon, he found the company of David Lloyd George and Bertrand Russell. Against the liberal family background, he chosen the path of progressiveness and became the Student Union President in 1933-it was an interesting co-incidence that four Foot brothers were served as President of either the Oxford or Cambridge University. Elder brother, Hugh Foot was a prominent administrator and interlocutor in the United Nation Committee on Decolonization where he headed the British delegation-he was an accomplished debater with vast experience in the British colonial service, later also served as Governor of Jamaica and Cyprus although in qualitative terms, he was very opposite to the socialist minded Michael Foot.
Senior Indian politician and a good friend of Michael Foot-K.Natwar.Singh, best described the contrast between two brothers; he rated, elder brother as right foot which always seemed difficult to convince-on the other hand, left foot {Michael Foot}always acted in favour of progressive ideas. Michael Foot became the Cabinet Minister {for the first time} in Harold Wilson’s government and acted as fierce backbench critic on issues ranging from wage restraint to Vietnam and government’s policies on Rhodesia-from 1970 to 1974, he had led the Labour Party in opposition and raised his strong opposition against the British entry into the European Economic Community.

The end of seventies was quite gloomy for both the Foot and Labour Party as Tories regained power in 1979 under Margret Thatcher, though in meantime, he tried to contain the growing separatist polarization in the party, in which he found success to an extant. He again served as leader in opposition from 1980 to 1983, but the election of 1983 detached him from active politics because of disagreements in the party, adverse Press campaigning and of course the growing age-afterwards, he remained passive from politics. A distinguished Journalist and author, he devoted his life for strengthening of democratic ideas and freedom-apart from his political profile, his stint in Journalism seems equally impressive, he served on senior on editorial position in Tribune, Express, Standard, and Daily Herald. Besides he written some books including of “The Pen and Sword” that fetched huge acclaim in intellectual circle-married to co-staffer, Barbara Castle of Tribune, Michael Foot demonstrated a fine balance between professional and family life. As a true friend of India, he would be missing by the caring people who believe and trust in relationships…when dual speaking swiftly becoming a cult in modern diplomacy, persons like Michael Foot will now hardly appear in the helm of affairs.
Atul Kumar Thakur
March24th 2010, Wednesday
New Delhi

Madeleine Biardeu: A Remarkable Indologist

On February 1, 2010, a very remarkable French Indologist Madeleine Biardeu had passed away at the age of 88-next day, I struck through her final updates by the Indian Newspapers and backed to the down memory lane of my early years of under graduation days in Banaras Hindu University when as an enthusiast of Indological studies, I had gone through her views on Advaita Vedanta, translation of the works of Mandan Mishra, Vachaspati Mishra and the grammarian Bhatrhari which all she compiled in her doctoral dissertation “Theory of Knowledge and the Philosophy of Speech in Classical Brahmanism{1964}”.
Personally, I impulsed for her work because to see her dedicated and unbiased inquiry on Maithil Sanskrit scholars like, Mandan Mishra and Vachaspati Mishra, hitherto they have been largely ignored by the Indologists-the way she elaborated the notion of orthodoxy and structural tension within the Brahmanism must be taken into account.

Genuineness was her epithet, which she had relentlessly demonstrated in her complex quest of comprehending the basic themes of Hinduism-her endorsement to see every individual as a sacrosanct divine entity was indeed a democratic alignment of Advaita Philosophy which enabled this spiritual cult for wider acceptance beyond the religious boundary. Born in Niort, in the west of France into a middle class of economy entrepreneurs, she joined the prestigious Ecole Normale Sup’ereiore of Serves {restricted for girls than} at Paris in 1943, where she studied philosophy and embodied with the classical heritage of Indian culture. What her works stands best on her personnel choice o the matter of religion or spiritualism-she herself, despite hailing from practicing Catholic milieu chosen to be a true secular in personnel life and berefted from it.
To know Indian history in real terms, she studied Sanskrit in India under the scholars and let herself intertwined with the Pandits and common folks of India to meet with the naturalization in her engagement with subjects. Further, she joined the University of Travancore for two years; in the 1950’s-later she maintained her close ties with India until 1990’s and used to visit at least once in a year.

Her major works included the translation of the Ramayana, two edited volumes of the Mahabharata and her works on Purana that provides an optimum account of Hindu scriptures-she received the companionship of French Sanskrit scholars, Marie-Claude Porcher and Philippe Benoit in the translation of the Ramayana of Valmiki into French {year,1999}. She succeeded to provide fresh view on Mahabharata; she considered the epic as an intellectual and religious reaction against Buddhism whose appeal among lower strata was disastrous for Brahmanical values-that was her personnel opinion and it must be seen in same context.
Her works on the twilight of career “Hinduism: The Anthropology of a Civilization {1994}” and “Stories about Pasts: Vedic Variations about the Hindu Goddess {2002}”provides a new outlook with meticulous interpretation-her institutional engagement with the Deccan college {Pune} and at the French Institute {Pondicherry, founded by the French Indologists, Jean Filliozat in 1950} was proved like backbone in her intellectual pursuits.

In laconic overview, crux of her work stressed on the unity of Hinduism by streamlining the end issue-her contribution in T.N.Madan’s edited volume, “The Hinduism Omnibus {2003}” shows this very lucidly. In comparative terms, her works stands in proximity with the ideas of Louis Dumont on most of issues including on Hinduism and caste system-Louis Dumont’s work “Homo Hierarchies {1966}” which is an essential text to know about the Indian caste system has many common features with the thoughts of Madeline Biardeu. Both these scholars had spent a considerable time in south India in deciphering the new meanings from Hindu scriptures and mythologies-today indeed their works are imperative for historical inquiries. She was equally well regarded in France for her accomplishments and served on most of institutional crucial position in his domain…passing away of Madeline Biardeu is indeed a big loss for these two countries.
Atul Kumar Thakur
March24th 2010 {Wednesday} New Delhi

Challenges before Financial Inclusion Plan & Role of Financial Institutions

Financial inclusion plan today conceived in most of corner as “buzzword” which sometimes under evaluate its actual area of impact-as this movement refers towards potential spread of institutional finance and financial awareness to cater the needs of hitherto unbanked segment of society, so it becomes imperative to judge the set of problems actually persists and its best suitable redressal. Historically, India as a nation and economy remains stoutly attached with the rural landscape and agrarian activities-despite consistently falling of primary sector’s {Agriculture}contribution in overall GDP, the proportion of headcounts involved in agrarian occupation still constitutes around two-third of total workforce in country.
Though alone the numbers of personal involvement in the agrarian sector doesn’t reflect the healthy trend in terms of prosperity or other developmental indices in comparison with the dwellers of services and or industry-primary reason of such asymmetry lies in disguised nature of employment potential in agrarian sector and very low access to institutional benefits, most notably of institutional financial access. The most visible reason that can be sighted is-low awareness among the persons who placed near or at bottom of pyramid about the benefits of banking to their personnel and professional life; indeed the case is much rampant in rural areas yet that shouldn’t be blamed alone for such materialization.

Infact,role of financial institutions except the Regional Rural Banks and some Scheduled Commercial Banks, remains far from satisfaction-on one side where Co-operative banks by and large caught in unhealthy business executions-on the other side, role of private Non Banking Financial Companies {NBFCs}and Micro Financial Institutions {MFIs}have been largely revolved around their exorbitant profit making proposition. In such condition, it’s hardly surprising that most of illiterate, downtrodden peoples especially in rural areas found themselves far from being fit to dwell with these financial players. Even worst, responsible banking as it slowly appearing within Indian banking as well, also counts merely the number of accounts opened as a real achievement of financial inclusion which poses adverse ramification on advanced participation in the sphere of institutional finance.
Here a lot of things have to be done for maximization and naturalization of partnership between financial excluded class and financial institutions involved in this sphere-equally imperative is financial literacy that plays real catalyst in optimization of financial access and its suitable management for better results. At the same time, banking research and survey have to be more pragmatic in streamlining the particular financial products for proper effectiveness since a lot of confusions are still prevailing about even the basic function of many concept-for example, Microfinance business , atleast in Indian context, these entities are hardly demonstrating their claim of actual Micro financial functions-most of them are acts like micro lender who provides micro credit unlike the real broad meaning; in real terms, Microfinance indeed have very broad range of function-from lending –investment to insurance function.

Unique Identification Numbers {UID}is a welcome concept that would at least end the traumatic web of verification of Know Your Customers {KYC} norms albeit it shouldn’t be taken as panacea for financial inclusion plan. Primarily, RRBs and other Scheduled Commercial Banks are catering the needs of institutional finance in rural areas-these institutions are now heading to assist the innovative models-such as Self Help Groups {SHGs}, this one is a visionary model in India context which emphasized on the collective effort on entrepreneurship-indeed, this model is feasible yet if added some more closer collaboration with the banks and SHGs with essential products like-Insurance, Mutual Funds etc, that’s outcome would be certainly appear more brighter. Integration of Indian economy with the outside world has drastically changed the outlook of banking business in India-on the wake of global financial crisis, Indian banking sector remains relatively unscratched through bad exposure and now catching the attention from world wide because of its sound regulatory norms and huge domestic market including a big chunk of untapped rural markets.
Moreover, the two upcoming changes in Indian banking-consolidation and foraying of new banking players may have far reaching effects for rural India as the style and focus; both are going to shape under the new dynamicism. In most of cases, stiff competition under the open economy leaves positive impact on end users-so; in near future there may be possibility of rationalization among the private MFIs to shift from existing exorbitant rate of lending. Challenges are many before the empowerment of end users with better financial inclusion, yet it’s possible through better regulation and streamlining the innovative practices in financial sector that can effectively address the actual plight of financially untapped.
Atul Kumar Thakur
November 24th 2010 {Wednesday}
New Delhi

Wednesday, March 3, 2010

Union Budget 2010-11: Upbeat on Indian Growth Prospects

The stock market witnessed a rare budget rally this time-at least after four years; fiscal policy shaped with the recommendations of the Thirteenth Finance Commission {TFC}that strives for a gradual exit strategy from the expansionary fiscal measures including those of stimulus packages given suing in the mood of market. Next on fiscal reform-government would target an explicit reduction in its domestic public debt-GDP ratio, that’s next big booster by the government at macroeconomic level to cut the fiscal deficit.
Indeed this year’s budget resembles the gentle temperament of Finance Minister Pranab Mukherjee who in reality neither falls under the category of populist nor in radical, so he avoided the any major reform and chosen the mid path to strengthen the rudimentary determinants of Indian economy with keeping the pressing challenges of upcoming time in mind.

On fiscal consolidation, Thirteenth Finance Commission {under the chairmanship of Vijay Kelkar} recommendations were taken into account while proceeding for the budgetary nuances.Zero revenue deficit and emergence of a revenue surplus by 2014, along with a progressive debt-GDP ratio of 68% for the Centre and States combined; hike in the share of states {taxes} in the net proceeds of central taxes to 32% from 30.5%, recommended by the previous commissions.Now the Centre and State should look forward for an ideal tax regime with no inconsistency on amounts released to states and the percentage share in net central taxes suggested by the commission is a long overdue. Except the contentious provisions of on Goods and Services Taxes {GST}, recommendations of the Finance commission were in proper direction with a lucid vision about the next phases of development.
Most TFC’c contentions, finally placed in this year’s economic survey besides practical maneuverings like-Public Private Partnership {PPP} to attain 4% growth in farm sector, policy boosters for progressive growth in farm sector, targeted subsidy {Including energy} to the poors through Universal Identification Card {UID} based smart card, focus on secondary education, use of vouchers and coupons to deliver the food and fertilizer subsidies etc.

The findings of economic survey” Improvements in urban and rural infrastructure with good governance could reform the existing developmental order and help India to attain double-digit growth in near future if executed in true spirit than it would deserve a huge applauds from all the corner albeit it would need government as an enabler and little bit of interventionist in specific matters.
Since the core aim of rapid growth to eradication of poverty and raising the standard of living could be met only by the targeted interventions with appropriate inclusion of the marginalized in development spectrum.So, for now, Pranab Da couldn’t be completely withheld from the interventionist measures. As prospects seems brighter now after confronting the world-wide financial crisis for two long year; Indian economy looks more resolute, so raising inevitable resources from domestic and external sources would not be a major problem, hence along with the inherent strength of the corporate sector may brighten the industrial outlook in medium term and overall GDP growth will certainly generate the demand from every level of social hierarchy. What drives the Indian economy is domestic demand and domestic savings-so, it’s quite critical for the health of economy albeit last two years statistics remains very adverse from such point of view.

The percentage growth in per capita consumption, after touching a high of 8.3% in 2007-08, declined to 5.4% in 2008-09 and further fall to the level of 2.7% in the current year-Gross domestic savings have declined from 36.4% in 2007-08 to 32.5% in 2008-09, a massive drop of nearly 400 basis point in a year. To check out these developments were a primary concern before the government; the announcement of Financial Stability and Development Council(FSDC)and Financial Sector Legislative Reform Commission(FSLRC) is a prudent move in this regard that signals more direct role of government in financial stability and macro-prudential decision making process. Pranab Da, an old world purist but have great vision for young generation has elegantly fetched some key initiatives out of his Pandora box-more transparent accounts, widening of personnel income tax slabs, setting of a more ambitious target for disinvestment, holding out the prospect of additional banking licenses to private players and making a beginning in the direction of legal reform; these all announcement makes the cheering inclusive and logical. More focus have been given on spending with curbs on non plan expenditure rather than stiff taxation; total government expenditures was stood {during budget} at Rs 11,08,749 crore {up 8.5% over last year} albeit borrowings came down to Rs3,81,408 crore besides exceeding the target of fiscal reform suggested by the Finance commission-the government plans to bring the fiscal deficit down to 5.5%, 4.8% and 4.1% of GDP over the span of 2001-13.

Indeed such broad scale plan towards the fiscal consolidation will be a very positive structural development for the country; moreover move to rolling back the fiscal stimulus in phased manners must impart some more goodness in longer terms albeit inflation remains a major concern-hike in Cenvat from 8% to10%, despite well short of the pre stimulus 14% and 2% increase in service tax now both stands unified at 10%; these are corrective measures preparing for the transition to a single rate and GST next by next year nevertheless its going to partially tease the spiraling inflation for a short period.Some more pressing challenges have imposed on petroleum products with following the Kirit Parikh committee’s recommendations to treat oil prices as par market realities-similar checks on fertilizer subsidies and cuts have been reversed from imports and excise duty on crude and petroleum products is indeed an unfortunate proposition for the time being as common mans are already facing too much ire from spiraling prices and atrocities of middlemanship.

Disinvestment target now set to achieve Rs40,000 crore for the coming fiscal-unlike the China or any other major economies of the world, Indian budget has its unique characteristics to pronounce the tone of major changes besides the usual description of accounts-let us see for its outcome. Fundamentals of Indian economy have displayed improvements since the opening of economy in 1991-ascent of money on Dalal Street witnessed 16% average annual returns on stocks since 1991; sensex rose from about 1,000 points in January’1991 to 17,478 points {Bombay Stock Exchange}by 2009 end. So, with these strong fundamentals and prefaced social commitments-the flagship rural job guarantee scheme, the NREGA gets a Rs1,000 crore hike from previous fiscal allotment{Rs39,000 crore to Rs40,000crore}, subsidy for the Rajiv Gandhi Gramin Vidyutikaran Yojna-aimed at electrifying villages was increased by Rs4,00 crore while the road building PMGSY got around Rs600 crore. Other programmes fare marginally better, Indira Awas Yojna funds hiked from Rs7,918 crore to Rs8,996 crore; the programme for National Rural Drinking Water Supply goes up from Rs7,200 crore to Rs8,100 crore-Bharat Nirman mission received a substantial Rs45,000 crore through Integrated Child Development Scheme {ICDS}.

Overall, social and rural infrastructure sectors to make up 62% of plan outlay-its among most remarkable budgetary allocation of Rs1,000 for every New Pension Scheme {NPS} account under the National Social Security Fund for Unorganized Sector besides plan for Urban Development Funds to go up 75% as a huge booster for Rajiv Awas Yojna was a long overdue, for a huge number of marginalized and persons from unorganized sector. Education have given its due with 15% increase in allocation, total gross expenditure on literacy and school education is stated to rise from Rs39,553 crore to Rs47,713 crore and on higher education-from Rs14,376 crore to Rs16,690 crore-Health sector marks the budget although even increased allocation is too little to build the required health services in the country, anyway funds have been raised from Rs12,289 crore to Rs22,300 crore.
An increased allocation of defense at Rs1,40,000 crore is justifiable in present circumstances-in another significant move, expenditure growth curbed to 8.5% by reducing non-plan expenditure and taking austerity measures, higher divestment proceeds and receipts from the auction of 3G Spectrum, these factors will bring down the fiscal deficit to 5.5% of the total GDP. Builders &utilities to benefit as infrastructure get 46% of the total plan allocation-for sure Rs66,100 crore rural development allocation will raise incomes in hinterland besides India Infrastructure Finance Company Limited {IIFCL}given a complete makeover to tap the opportunities of housing finance with a huge Rs20,000 crore of support.

Impact on new economy would be slightly disturbing as Software Technology Park of India {STPI}tax holiday not extended beyond March 2011 though the plan for expenditure on technology to push e-governance and plan to set a National Clean Energy Fund is very encouraging to cope with the multi dimensional approaching challenges. Tax slabs broadened to give substantial relief to individual taxpayers-this is a handsome gift for the great India middle class as new slabs going to infuse lot of money in their hand-proposed IT slabs are: Rs3lakh to 5lakh {10%}, Rs5lakh to8lakh {20%} and on more than Rs8 lakh stands at 30%-exemption level is remain intact at Rs1, 60,000 except the women’s and senior citizens besides an additional deduction of Rs20,000 allowed for investment in infrastructure bonds going to increase the disposable income for investment albeit it would have more progressive if it might be also chosen to increase the lower slabs to Rs 2lakh to boost the spending and saving capacity among the low and medium end service dwellers. In indirect tax-like of Minimum Alternative Tax {MAT} from 15% to 18%was surprising though cutting of surcharge on Corporate tax from 10%to 7.5% is a leveling exercise, hike in deduction for in-house research& development to foster innovation, Real estate companies get more time to claim tax deduction on profits, 2%hike on Cenvat is indeed an jolt on companies but unlikely to derail recovery that aligns on way to GST-Cenvat is the medium excise duty rate applicable on nearly 90%of the goods made locally, peak custom duty unchanged but crude gets a 5% duty shock –these are the mix rulings for indirect taxes.

This year’s budget marks a trend with shift in alignment from indirect taxes to direct taxes-an explicit pastime of a service dominated economy-some of the positive stances like, for the first time, government has decided to target an explicit reduction in domestic public debt-GDP ratio, it will bring out a status paper giving a detailed analysis of the situation and a road map for curtailing the overall public debt. In a rare step towards the fiscal reform, this budget brought fertilizer and fuel subsidies under its purview -by taking this decision, the Finance Minister showed that his commitment for fiscal consolidation is not merely in lip service.

In another very important move on financial sector reform-RBI has asked to prepare for next inclusion of some more private players to foray in banking services besides capitalization programmes for Public Sector Banks including some of Regional Rural Banks {RRB’s} with an allocation of Rs16,500 crore, that would give new pace in modernization of these banks…especially RRB’s would be benefited most because of its ongoing Core Banking Solution {CBS}adaptation which creates some outside assistance imperative. Mutual Funds would relieve as Dividend Distribution Tax {DDT}remains unchanged beside positively changing investment scenario is going to immensely help their business; unrealized gains of non Life Insurance companies will not be taxed-Health Insurance sector also got some new induces.In2003, the government made a law , the Fiscal Responsibility and Budget Management {FRBM}Act with an ambition to eliminate the revenue deficit by 2008-09 and limit fiscal deficit to 3% of GDP, the economy was on fine track to met the FRBM target-having already cut deficit to 2.74% of GDP in 2007-08 and further brought down the revenue deficit to 1.1% before global financial crisis has entirely curtailed those pace albeit after this budget some hope could be conceived to retrieve the FRBM targets in next two fiscals.

Pranab Da, with his great caliber and intentions succeeded to push the Indian economy towards new and vibrant directions nonetheless tackling the all nuances of developmental challenges would be required a transparent execution mechanism at every step of legislative and bureaucratic order, until that wouldn’t ensure, it would be hard to imagine about the tectonic shift in conditions. Inflation and mad rush of Price rise is a matter of grave concern since despite not being sure about the actual poverty level in country, it should be foremost aim of any policy maneuvering to be sensitive on the haunting plights of poors at large. At the end of the day, execution-the only word should be recalled to step up for heading on with the challenges…as a democratic nation, we always have to think in terms of our valuable constitutional order which always gives enough space to formulate a just and equitable socio-economic order for all components of India. Drive for financial inclusion {with the delivery of UID based smart cards}and prospective activism to eliminate the hunger and raising the level of entitlement to the resources of nation for all would be great step before crossing the threshold of crest in economic terms. I always think a good mix of politics and economics could be the finest way out for an economy to proceed on the level of excellence-neither of one is worth of missing.
Atul Kumar Thakur
March2, 2010, New Delhi