Social Fault lines: Ideas for Budget 2018

T he Union Budget comes in the wake of much social and economic angst amongst farmers, the youth, small businesses and the urban middle class. 

Published: 28th January 2018 04:00 AM  |   Last Updated: 28th January 2018 07:49 AM   |  A+A-

Shankkar aiyAr Author of Aadhaar: A Biometric History of India’s 12 Digit Revolution, 
and Accidental India

T he Union Budget comes in the wake of much social and economic angst amongst farmers, the youth, small businesses and the urban middle class. Essentially the budget is an annual financial statement laced with promise of change. Much of what must be done lies in the domain of state governments. The BJP, on its own and with allies, is in power in 19 states—including in the largest, the most populous, the poorest and the most industrialised.

Budget 2018 affords an opportunity to craft policy and allocations to get a bigger bang from the taxpayer buck. Here are some ideas which may help heal socio-economic fault lines.
FILL UP THE POSTS: The debate on job creation is stranded between the known and the unknown. What is known is that at least 2 million posts—for teachers, police personnel, railways, health-care workers—are lying vacant. There may be more. Why not incentivise filling these posts—with a cost sharing formula or with one-time grants? The filling up of vacancies will enable improvement in law and order, safety in railways and of human development indicators.

ENABLE GROUP FARMING: India’s largest private sector awaits liberalisation. Critical to success is scale. Group or collective farming promises scale and therefore access to finance, inputs, technology and markets—plus the power of collective bargaining. A template for group contracts, tax incentives for private participation and a regulator could kick-start the second green revolution. Focused cropping will deliver higher incomes and help manage food price inflation.

LIGHT UP THE SCHOOLS: Poor learning outcomes in schools need technological intervention—for delivery of quality content and teaching. This is daunted by the fact that over 39 per cent of the 14.9 lakh schools do not have electricity (DISE 2015-16). Funding of electrification through conventional and off-grid solutions will enable induction of technology solutions. A blend of philanthropic and private participation could propel skilling and lead to a harvest of demographic dividend.

PREPAID POWER COUPONS: The business model of electricity generation and distribution is a wreck thanks to theft euphemized as T&D losses. Prepaid coupons for metered supplies using the Direct Benefit Transfer platform could deliver power to poor households and to farmers. The free power regime really is a no power or poor supply regime for farmers. The aspiration of electrification for all demands an end of the distortional policies.

KHADI FOR RURAL REVIVAL: Khadi as a concept and a platform is under-rated, under-utilized and under-funded. The existing platform of Khadi and Village Industries Commission can be leveraged to promote village-level entrepreneurship in new sectors and even exports to the diaspora. Imagine KVIC as an incubator across the country, enabling funding, contracts and market access. The emergence of e-commerce platforms and the reach of institutions such as Amul provide an opportunity to connect skills with demand and markets—for crafts, fast moving consumer goods, wearables and pre-cooked eatables. If Patanjali can do it, why not KVIC!

DIVEST IN PSUs TO 51 PER CENT: Critical for expanding delivery of entitlements and services is funding. The combined market cap of CPSEs is around `15 lakh crore. It is inexplicable why the government must hold excess equity—sometimes up to 80 per cent—in these companies. Estimates suggest that divesting equity in all CPSEs to up to 51 per cent for starters could release as much as `3 lakh crore. Instead of the annual soap opera, why not divest at one go up to 51 per cent into an ETF or a Trust and use the money to retire debt and deficit and for social and physical infrastructure?

AFFORDABLE HOUSING: Cost of land forms the bulk of cost of housing. Use of surplus and idle land of CPSEs, ministries, railways, sick companies and state governments can bring down the cost of land. It is estimated that CPSEs hold over 6,200 sq km—a large chunk of which is surplus and idle. The government land information system already has data from 30 ministries. This should yield data on total, surplus and encroached land. Parcels of land, post-clearances, could be made available on lowest cost competitive bids for affordable housing townships across cities. A caveat: keep the PSUs out and focus on scale.

END DUMB CITY POLICIES: The average urban Indian commutes between two and four hours every working day. Cities are bulging and spreading through outer limits like amoeba, pushing up cost of housing, aggravating pollution, power, water and waste management issues. All of this is thanks to random, arbitrary and poor floor space (FSI/FAR) and usage policies. A study by Niti Aayog should assess the cost of these misplaced policies. Higher FSI, integrated residential/commercial complexes will deliver scale for in-situ provision of services—water and waste treatment, power back-up system and public spaces. It may help revive old cities and rescue new ones from collapse. 

1-800-GOVERNANCE: The government, at the end of the day, is a service provider. As with all service providers, it must have a feedback mechanism, for grievance redressal and for resolution—a platform for citizens to access. There is a crying need for a 1-800-Governance system, voice and app, for citizens to dial an IVR or log into apps to redress issues—with dial codes or tags for levels of governments and departments as done by private platforms. Complaints could be tagged to local MLA/MP via SMS for follow-up. There is a confounding plethora of apps in the system. Why not integrate them under one Governance umbrella. Funding can come from MP and MLA local area development funds—after all, better services will lower incumbency and improve electability.
shankkar.aiyar@gmail.com

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