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EDITORIAL Although Central budget is to be presented on Feb 28, Finance Minister has already inter-acted with all those who matter. With these inputs, performance of the economy during the ongoing year and areas that need massive thrust already identified, rough contours of the budget are making the rounds. In the absence of specifics because these are likely to be misconstrued as 'leakage' when Parliament is in session,....more Devasthanam Trust is all set to initiate most ambitious ropeways for the temple visited by 2 crore devouts each year and from where annual income of more than Rs 300 crore accrue. The 100-crore project is slated for completion within the next 20 months i.e. by 2002 end. One is tempted to contrast it with the Gulmarg ropeway that took many years. As luck would have it valley remains without tourists. It shall be so as long a insurgency persists. As on now neither the army nor the Central Government nor .....more |
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Constitutional
review By Nalini J. Singh Minister-Civil
servant By E.A.S. Sharma By Jyotshna Pandit Lawyers strike, By Tahir Khurshid Raina |
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EDITORIAL Although Central budget is to be presented on Feb 28, Finance Minister has already inter-acted with all those who matter. With these inputs, performance of the economy during the ongoing year and areas that need massive thrust already identified, rough contours of the budget are making the rounds. In the absence of specifics because these are likely to be misconstrued as 'leakage' when Parliament is in session, it has to be invariably an unofficial guess work for records sake. Yet it is not difficult to hazard something on the lines and priorities based on valuable suggestions made by economic experts and recent directives of the Reserve Bank of India. By far the largest concern stems from sluggish demand. To give boost to industrial activity demand must be boosted as also the export potential tapped. India enjoys the benefit of having largest number of middle class, even more than what China has. It is obvious that this segment remains the key to demand. In fact, even multinationals tend to target this segment whenever they decide to enter Indian market. Even as our policy makers prefer investment in infrastructure sector from abroad, the nation has to live with the proposition that preference of FDIs remain this largest segment of our population- the middle class. So many tailor-made schemes are coming up like the zero interest rate, easy monthly instalments or gift schemes to somehow attract the middle class to their respective products. It is a competitive race in which car giants as also the consumer goods manufactures like Hindustan Lever are presently engaged to somehow keep their market share on course. It is safe to surmise that right now it is a buyer's market which has wide choice and options. Still there are market surpluses. It is here that massive export effort comes to play the crucial role. In fact, that is what exactly China has done by flooding Indian market with large quantity and variety of consumer goods which has sent ripples down the spines of indigenous industry. True, many safeguards exist and Finance Minister is ready to do more. But his advice last week cannot be ignored. He says there is limit to protection. He can give 50% or even 80%. But surely not more than that. The advice is that Indian industry both large and small scale must become more competitive and learn to live with the competition because India is a member of WTO which prescribes easy access either way. It is good news that last year Indian exports went up by 22%. Efforts have to be made to make them yet more qualitative and competitive to not only retain existing markets but also tap new ones. To give boost to the industrial activity Bank rate is already slashed by half percent. Further reduction by another half percent is on the anvil. This means cheaper credit which should make the industry more competitive and come out of sluggishness. There are indications that Government is about to slash interest rates on small savings instruments in post offices by one percentage point so that banks do not feel disadvantaged in terms of mobilisation of deposits. It may be mentioned 80% of the post office deposits are lent to the respective State while Bank deposits plough into industrial activity. Lesser deposit rates would also encourage investment in capital market through several instruments like mutual funds. Deficit financing remains the economic villain. To contain it additional resources have to be mopped up which is an unpopular step particularly during run-up to assembly elections in five States. The regional satraps in the NDA will not allow Finance Minister any liberties. The other method of keeping the fiscal deficit down is to stop wasteful and unproductive expenditure. Government has already indicated resort to VRS for Central Government employees to reduce the unwieldy establishment by 10% over the next three years. Disinvestment in PSUs is another way out. It gives Government additional amounts to reduce the deficit. Closure of acutely sick units is also on cards. All this may not be enough in as much as employment generation has to go side by side for which investment in infrastructure sector has to pick up fast. It is precisely in this context that whatever bottlenecks exist in attracting Foreign Direct Investment (FDIs) are slated to be removed. In fact, almost all sectors are being opened up for FDIs. It may be mentioned that during last year India could attract only about 4 billion FDI while China logged a hefty 45 billion dollars. This is quite off mark in that Prime Minister had stated that FDI must go upto 15 billion dollar during the next two years. FDIs come to countries which are liberal, minimum restrictive regime, politically stable and of course where good return is available to them. If China can provide all these attractions there is no reason why India cannot do it to remove sluggishness in the inflow of FDIs. Next to middle class, it is the agriculture class that generates demand. Farm policy needs long term planning which would make it attractive for the farmers but not at the cost of losing competitive edge. Crop pattern has also to be so encouraged so asto obviate the necessity of large imports of pulses, oilseeds and oils. Large funds are needed for rebuilding quake-ravaged Gujarat, for investment in infrastructure, for national security (defence budget). Scope for fresh levies is limited due to ensuring assembly polls, intra-NDA contradictions and rising inflation warranting additional DA. Finance Minister shall thus have to opt for innovative approach for stimulating internal demand, boosting up exports and attracting more FDIs, without hurting the common man. Devasthanam Trust is all set to initiate most ambitious ropeways for the temple visited by 2 crore devouts each year and from where annual income of more than Rs 300 crore accrue. The 100-crore project is slated for completion within the next 20 months i.e. by 2002 end. One is tempted to contrast it with the Gulmarg ropeway that took many years. As luck would have it valley remains without tourists. It shall be so as long a insurgency persists. As on now neither the army nor the Central Government nor for that matter anyone in the State ruling hierarchy is prepared to give any time calender for end of insurgency. In fact, statements have been made at the highest level that insurgency of this type continues for unspecified periods.Yet additional sum has been allocated to Gulmarg ropeway project. None minds it as long as it is viable. One hopes that normalcy would down sooner than prophets of doom would like to predict and with that this would be star tourist attraction. Until that time it would remain a losing proposition. Never mind. The point relates to such ropeway projects in Jammu region where viability and profitability is definite. Some time back ropeway was mooted for Katra-Sanji Chhat-Shrine. It is the most beautiful thing that can happen to this pilgrimage. The initiative for this should obviously come from the Shrine Board. If it can opt for University and other programmes there is no reason why ropeway project should not be pursued which would cut time, cost and make the environs virtually pollution free. Even though someone may not like it but it is reminded that the much smaller cable car project connecting palace with Bahu Fort is yet to take-off. Other ropeway projects can also be surveyed as they are attractions for the tourists. |
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