Sunday, February 28, 2016

Union Budget: Which way will it go this time?

As the union Fiance Minister prepares to place Budget 2016-17 in parliament today, I am re-posting my article written on 8th Feb that had shown how lakhs of crores worth money have been siphoned off from PSU banks by the super-rich of India and which is ultimately to be borne by common Indians. In this article, I have also given indication of what all real development works could have been supported in the country had this siphoning off not happened.

My broad wish list for the budget...

The budget, besides giving more opportunities for growth to common Indians, should have strict measures to impose 'retrospective taxes' on corporate giants who are planning to siphon off lakhs of crores by pressurizing the government on that; should tax the super rich and corporate houses more and eliminate tax regime for the common Indians because they are already facing a lot of burden via indirect taxes; should stop all sorts of 'Corporate Karza Maafi'; have a stringent mechanism to recover the 6 trillion worth Indian rupees that have been siphoned off from banks through frauds (my article has a small mention of that as well); and invest heavily on public health, education, irrigation and agriculture sectors.

The rural areas need special focus!


Phew! With this kind of money Ganga can be cleaned 10 times over!!

Reading Time: 2 minutes
Responding to a right to information query by the Indian Express, the Reserve Bank of India has said that in an 11-year period – from 2004 to 2015 – 29 state-owned banks have written off bad debts worth Rs.2.11 lakh crore.
Almost a half of the waiver, Rs.1.14 lakh crore, has been granted during the last three years between 2013 and 2015.
The figures are huge by any standards, exposing complete lack of transparency in Indian economy and the unhealthy situation it is in.
More shocking is the fact that none of this information has been put on public domain even though our Finance Minister Arun Jaitley and other ministers have all along been reminding us about the robustness of our economy.
In the recently concluded World Economic Forum at Davos, Jaitley said that our economy is at the right hands with sound footing locally, and could certainly grow by 8-9 per cent in a friendlier global climate!
But as the RTI query revealed, India’s super rich have certainly been the major beneficiaries of these waivers.
Now, had the government been proactive and efficient, the bad debt that the public sector banks wrote off during 11 years could have funded numerous schemes for benefit of the common Indians, besides saving the banks from the disgrace, loss of reputation and economic doldrums.
Let’s try and give a few examples:
–India’s much ambitious Ganga river cleaning project could have been funded ten times over. Last year, the central government approved a budget outlay of Rs.20,000 crore for rejuvenation of the Ganga over a period of five years.
Going by this standard, all major Indian rivers would have been cleaned with the money waived.
–The food subsidy bill for the entire country could have been funded for nearly two years. India’s food subsidy bill, that is supposed to benefit the poor and hungry, stands at aboutRs.1.24 lakh crore.
–The Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) can be funded more than six times based on the current annual allocation of a little less than Rs.35,000 crores.
It means six times more job guarantee opportunity and income for the rural poor. MNREGS has also been hailed for checking distressed migration, fighting drought and even helping Indian economy put a fight against global recession periods recently.
–The Indian Railways can continue to subsidize common Indian commuters’ fares and other social costs that make consumer goods reach at low rates helping in curbing price rise et al.
Currently, all such subsidies are said to be costing the Indian Railways a little less than Rs.25,000 crore a year. It means, with all the money that the banks waived off during 11 years could help railways continue with these
social support activities – that in fact is its duty – for the coming eight years and more.
The question is, “can we get back the looted money from our banks?” At stake is the FM’s capability, and India’s credibility!
Post Script: A few days ago, another RTI query by pointed to a fraud that involves siphoning off of Rs.6 trillion!
It had said, as per information received from the banks, 26,330 fraud cases (involving amount of Rs.1 lakh rupee or more) were reported from January 1, 2010 to December 31, 2015 and total amount involved is Rs 57,69,661.88 lakh!
(Ranjan Panda is an Indian environmentalist, water and climate change expert)