India is bracing for the annual ritual of the Union Budget, which is expected to miraculously resuscitate the economy. But every budget also carries Trojan viruses and unfortunately, the damage they inflict does not usually become public until it is too late.
It has recently been reported by local media that Indian finance minister P Chidambaram is planning to curtail overseas development assistance. The report quotes an official as saying that the impact will be quite severe, and affect all foreign projects.
In financial year 2012-13, the foreign ministry had asked for Rs 5,600 crore to fund development partnership programmes but received only Rs 4,000 crore. This was just above half of the ministry’s total budget for 2011-12 of Rs 7,836 crore. Now it may be slashed even further.
South Asia gets more than two-thirds of this assistance. A budget cut could hit India’s efforts to expand influence in the neighbourhood, hurt its Look East policy, and spell premature end to its African safari.
India’s bête noire China is spending billions to win friends and influence people all over the world.
Last December, Indian foreign minister Salman Khurshid had identified budget constraints as an impediment to India’s diplomatic push. Khurshid had been frank enough to say that soft diplomacy cannot be done on a small budget.
The move could not have been more ill-timed. India’s bête noire China is spending billions to win friends and influence people all over the world. It has just won the right to manage the strategic Gwadar port in Pakistan. The Chinese financial might combined with its string of pearls strategy were trouble enough, and now the budget may end up further weakening India’s sorry excuse of efforts to counter growing Chinese influence.
But the government which on the one hand is looking to cut subsidies and overseas assistance in the name of fiscal prudence is simultaneously preparing to splurge at least Rs 1.2 trillion, over $22 billion, annually on its plan to ensure food security to 75 percent of the rural population and 50 percent of urban population of the country. The coming budget will provide for the scheme.
India faces an annual skills deficit of 7 million people.
The country is still debating how the rural jobs guarantee scheme, MNREGS, has harmed the Indian economy. And now the government is planning to saddle the taxpayers with another scheme which it hopes will help the Congress party win the 2014 general elections. Those living in rural areas especially are not being taught any skills that will help them move up the chain. The MNREGS involves physical labour usually in digging ponds and building roads. Many cases of data fudging to skim money have come to the fore.
India faces an annual skills deficit of 7 million people. The government is not committed to spending either on education or on skill imparting institutes such as ITIs and polytechnics. It would rather leave education to the private sector. This way it shrugs off its responsibility and the private entrepreneurs get to mint money by setting up schools and universities. Not only does education remain beyond the reach of the poor but the quality is also suspect.
Abraham Lincoln said, “A statesman is he who thinks in the future generations, and a politician is he who thinks in the upcoming elections.” India today has leaders who are neither. The short-sighted politicians running the government are bungling from one crisis to another, blaming others for the problems and hoping tomorrow will be another day and somebodyelse’s mess. If you look at the recent economic data, common Indians have lost hope- and are prepared for things to get worse.
by Ashutosh Misra
