Modi at Davos and Budget

WILL THE REAL MODI PLEASE STAND UP?

• Depending upon the audience Modi takes different avatars.
• In Davos last month, Modi defended globalization and warned against protectionism but his last week's budget did not suggest pro business statesman, but a protectionist strongman familiar in poor countries.
• The last budget before 2019 elections squelches any hope that Modi would push long pending market friendly reforms.
• But the budget confirms his re-election plans i.e. grand pro-poor gestures avoiding any pro-rich plans. 
• Modicare plan for 50 crore poor people, even though with initial allocation of a pittance of Rs.2,000 crores, devastated Bombay Stock Exchange wiping out investor health by more than Rs.5 lakh crores on a single day.
• Faced with failure of 'Make in India' to boost employment, government hiked import tariffs to coerce companies to build mobile phones, auto parts, toys etc in India.
• These protectionist policies, which failed in the past, will only ensure Indians pay high prices for shoddy goods and firms getting more interested in manipulating duties than satisfying customers.
• FM Arun Jaitley's initial promise for lowering corporate taxes by 2021 appears unrealistic with economy growing at mere 6.5%.
• In the last 4 years, Modi failed to privatize a single public sector enterprise even though Air India privatisation is in process.
• ONGC buying out HPCL is only Government exiting business falls short of privatization. 
• No Indian politician can bolster his 'pro-poor' credentials without also sticking to the rich.
• According to the law passed in 2003, central government is committed to limit the fiscal deficit to 3% of GDP by 2009 whereas budget 2018 indicates fiscal deficit at 3.3%.
• Some analysts argue that budget could have been even worse.
• It is too soon to say whether government will stick to its budget estimates or open its populism gates even wider as elections approach. 
• But one thing is certain: Davos version of Modi bears little resemblance to his domestic avatar.

Modi doesn't do what he talks and doesn't talk what he does

Politics without principle, progress without compassion, wealth without work, 
learning without silence, religion without fearlessness and worship without awareness 
will destroy human race ...  Anthony de Mello

For every politician winning election, at any price, is foremost. Anything else secondary. Therefore Modi will do anything including destruction of economy or arousing communal passions or declaring war on Pakistan or anything for winning 2019 general elections. But one thing is certain. He will give nothing really to the poor. He rather believes in fascist Mussolini type spectacular announcements  followed up by relentless media campaign and propaganda. Lacking humility, honesty, integrity and morality, he is dangerous for Indians and its democratic polity.

Jaitley’s world’s largest health programme

• Universal Health Coverage (UHC) by definition means universal coverage for all medical expenses whereas this health insurance scheme covers only a part of the population (ten crore households i.e. about 40% of population) for in-patient care alone.
• Universal health insurance through private hospitals has not worked for the poor anywhere in the world. There is no substitute for public health care and this needs to be strengthened.
• The real beneficiaries will be insurance companies and corporate hospitals much more than poor people.
• There is bound to be more misuse than any proper use.
• This scheme does not address the main issue of out-of-pocket expenditure. In India, 67% of all expenditure on health is out-of-pocket and of this, 63% is on out-patient expenditure.
• National Sample Survey shows increasing out-of-pocket expenditure. The analysis of  NSS data shows that only 1.2% of the hospitalization cases of the rural population and 6.2% of the urban population received even part reimbursement from existing Arogyasree, RSBY etc schemes. They did not affect the likelihood of inpatient out-of-pocket spending, the level of inpatient out of pocket spending or catastrophic inpatient spending.
• An amount of Rs.1,200 crores for 1.5 lakh health and wellness centers works out to a meager Rs 80,000 per centre serves no purpose. This featured in the 2017 budget speech but from the experience in the previous year, it is unclear what this actually means.
• How can centre fix 60:40 sharing unilaterally? States are not its subordinates and must be consulted before finalizing any such schemes with huge burden on them.
• The centre state sharing of 60:40 doesn't have any scientific justification. It burdens states and their existing pathetic healthcare infrastructure will crumble. The ratio must be 90:10.
• The premium payable will be around Rs. 2,00,000 crores and such a large amount could be  used for upgrading and modernizing healthcare infrastructure rather than transferring to private parties.
• Accredited hospitals are highly concentrated in certain urban pockets, making it inaccessible for most of the rural poor.  
• The existing RSBY scheme with coverage of Rs.30,000 and the expenditure never exceeded Rs.500 crores in any year and these figures put the credibility of these announcements under doubt.
• This focus on insurance instead of strengthening availability of public services provides more opportunities for the private sector to make money out of poor people’s illness. 
• Budget also announces a change in the ‘health and education cess’ from 3% to 4%, and it is estimated to bring in Rs 11,000 crore where as allocation is meager Rs.2,000 crore and Jaitley is profited by Rs.9,000 crores.

Commonsense tells us that insurance and corporate hospitals could be roped in to provide specialized treatments only never universal public health care. Ignoring healthcare of poorer section during first 4 years and now suddenly shouting loudly as champions of public health care in 5th year is nothing but chunav jumla rather than any seriousness. Modalities finalization will take no less than 6 months and 2019 elections are less than 6 months away. Such election gimmicks hardly give any political benefits. This scheme may not give any real benefits. Finally, this scheme is another Modi's spectacle without any substance.

Rising fuel prices indicates economy in mess?

• Govt of India is the biggest cheater of nation and Prime Minister and his gang (read Cabinet) are worst cheats. 
• During the past three years, crude oil prices in international markets have fallen to 1/3rd and more than 80% of it was knocked off by GOI in the form of increased excise duty.
• Every fortnight Oil Companies adjust their tariff matching international prices in Shastri Bhavan and North Block announces increased excise duty within an hour.
• Since few months fuel pricing was shifted from fortnightly to daily and consumers were to benefit from falling crude prices without any delay is what Arun Jaitley surreptitiously indicated to people of India. 
• But what happened is opposite and reduction in excise duty was conspicuously never mentioned as if it is irrelevant item. It becomes relevant only to lay hands on people's money and not otherwise. Today fuel prices in India are one of the highest in the world. Worse than Pakistan and Sri Lanka.
• Higher fuel prices resulted in higher commodities prices and cost of living is almost doubled, especially to workers and wage earners, during past three years of Modi regime while it was static throughout the world. Are these 'Achche din'?
• For all these non sense activities of driving economy into mess, Modi & Jaitley neither has people's approval nor sanction of Parliament and this issue was never in the agenda of Lok Sabha or Rajya Sabha. Gross misuse of Executive powers by PM & Ministers. Why can't they stick to sanctioned budget and follow standard expenditure procedures?
• What Modi and Co talk of 'bold fiscal reforms' and raising taxes any time they wish are contradictory to each other and none in world will believe our government. Our credibility is lost and who will come to our country with bags of dollars for investing?
• With these bunch of rogues and cheaters at the helm, there is no way we can progress as a nation.

In a democracy, winning election doesn't confer on winner

autocratic powers to do nonsense things. He must confine to 'rule of law'

Government must confine its expenses with in the legislature approved  budget, in letter and spirit. Only emergency expenses could be met with executive orders. Ditto for modifying tax rates. Today Budget and Parliament are just formalities. Govt does what ever it wants to do, albeit whimsically, without following any procedure or laws and answers none. No rule of law for governments. It is only for the people. Once in a while, courts strikes down some actions of governments giving resemblance of existence of democracy. Our FM Jaitley has announced several times before GST roll out that its revenue model is neutral meaning some prices may go up and most prices will come down and overall government doesn't get more or less. Then why all commodities prices have gone up including food and essential items? Any answer?

Demonetization effect: RBI dividend to Govt halved

• The RBI dividend  paid to the government is the lowest since 2011-12 (Rs 16,010 crore).
• The RBI did not provide any reason for the decline in dividend. 
• Economists said this indicated the cost incurred by the central bank in printing new notes as well as in sterilizing liquidity old currency notes that were scrapped returned to the banking system.
• In the Union Budget for 2017-18, the government had accounted for a dividend of Rs 74,901 crore from the RBI and other nationalized banks. RBI’s share would be Rs 58,000 crore. 
• RBI Governor Urjit Patel told a parliamentary panel that notes not returned remain the RBI’s liability and cannot be passed on to the government as dividend. 
• The low actual dividends will exert pressure on the government and its fiscal deficit could increase from 3.2% of the GDP to 3.4% this year. 
• At its peak, the excess liquidity parked by banks neared Rs 5 lakh crore, on which the central bank had to pay them 6% interest.  The average daily liquidity absorption continued to remain above Rs 2 lakh crore after demonetization was announced.
• The appreciation of the rupee, 6% since Jan 2017, against the dollar depressed returns, in rupee terms, on the RBI’s foreign holdings.

Modi who highlights and bombards on media even smallest achievements are great, will never talk about such negatives. As Gujarat CM he neither owned up responsibility for massacre of over 2000 Muslims nor regretted it. So far, he has not talked about demonetization failure, its impacts and remedial measures taken for mitigating the problems it created to common people of India, especially in Parliament where he is duty bound to do so.

Budget worse than demonetization.

DEMONETIZATION 2016:

• Demonetization was a wrong tool for Modi's highly publicized objectives of black money, corruption, fake currency and terrorism funding.
• His greed to amass Rs.5 lakh crores (as per affidavit filed in Supreme Court) proved blatantly wrong with 97.5% cash returned to RBI.
• The estimates are that DeMon costed nation, during the 52 day period, is Rs.128,000 crores while benefit of unreturned cash and higher taxes might not exceed Rs.60,000 crores.
• Modi is answerable under what authority and process of law, he did this non-sense.
• Modi shifted goal posts to 'cashless transactions' with infrastructure support is at least a decade away.
• Now Modi & co are relentlessly campaigning that long term benefits will follow due to their courageous & historic demonetization. But in long term many changes good & bad will occur. What relationship they would have with demonetization can't be established?
• Jaitley says now he has details regarding high value deposits and would persuade them to account for and comply with tax payment. For this purpose Rs.128,000 crore demonetization was unnecessary. 
• No black money hoarder lives in villages. Most live cities and some in towns.
• Every person living in dwelling unit above 3,000 sq.ft. in cities and/or riding car with value above Rs.15 lakhs is a possible tax evader and black money hoarder. They could have been investigated straightaway. Toning up tax administration would have been enough.
• There was no justified reason to destroy RBI and informal economy.
• What ever money got into banks is at the expense of informal sector's working capital which is now crippled and impacts GDP, growth, tax revenues and above all employs millions of uneducated and less skilled workers.
• Banks suddenly cash rich has no way to invest and earn and pay depositors. Lending in market is a slow and steady process and will take its own sweet time. How banks will pay depositors is a million dollar question. 
• With deposit rates slashed by banks, most investors will withdraw or divert their money for higher returns despite some risks.

BUDGET 2017:

• This is the worst budget I have ever seen. I listened throughout FM speech but found nothing standing out. 
• Intermittent claps by Modi & co and Jaitley's smiles carries no meaning.
• The budget claims to have focused on rural spending and poverty alleviation. 
• When ever budget has huge money, Modi's focus was on 'bullet train' like things and when there is no money, he talks about rural segment.
• Neither the revenue collections nor external borrowings would be unachievable with the effect of demonetization. 
• While demonetization had inflicted massive injuries to poor & lower classes, the budget reliefs are like applying some balm which neither cures nor provides total relief. 
• Urban middle classes who stood blindly & solidly behind Modi, with demonetization not affecting them at all, and with blind belief that somehow 'magic wand' demonetization will work were let down with very low income tax concessions even in Modi's 4th budget. The previous three budgets income tax rates etc remained unchanged.
• The tone of the budget acknowledges the failure of demonetization and its stated objectives.

The budget speaks volumes about our economic situation, post demonetization, the worst since 1992. The near junk status rating up gradation is a distant dream. Huge revenue deficits even in 4th budget of Modi is unpardonable despite low oil price regime since 3 years. Brexit and Trump policies has destroyed our dreams to build economy on export model like China. PV Narasimha Rao redefined 'self suffciency' in 1992 as 'ability to pay imports through exports' is dependent on external factors on which we have no control. Hence Nehru's self-sufficiency model of producing and consuming within India with some exports & imports, excepting is crude oil, is self sustaining and long lasting. Modi is corrupt, untrustworthy, liar, greedy, selfish, unpredictable, fundamentally hypocrite, shallow knowledge and with hidden objectives. For nation to prosper it is better to get rid of him from centre stage. 

TS & AP Budgets in Doldrums

Prior to bifurcation in 2014, Andhra Pradesh budget was about Rs.100,000 crores. After bifurcation Telangana (TRS and KCR) were under celebration spree and spent public money like water. In AP, TDP and Chandrababu Naidu were jubilant regaining power after 10 years, even though in the truncated state of AP, spent public money extravagantly for swearing in ceremony etc. Of course AP expenditure increased for identifying capital, it's design and many other expenses. However, there was no justification for wasteful expenditure in both the Telugu states.

 

The 2015 budget for AP has inflated figures to over Rs.100,000 crores and not to be left behind TS also inflated its budget to over Rs.100,000 crores. Ironically, year end figures fell short by over 30%. Not learning lesson, both the state's presented 2016 budgets inflated to Rs.130,000 crores.

Budgets exceeding realistic revenues have wide ranging negative effects. Departments, with approved budgets starts various projects/schemes but will fail to get money released in time and make timely payments losing credibility apart from time & cost over runs. The recent strike by network hospitals of 'Arogyasri' to recover their Rs.350 crores dues is a classic example. Fiscal discipline by states is paramount otherwise suppliers and creditors will insist on letter of credit for executing state government orders. Deviations in budgets and actual figures must be viewed seriously and accountability fixed on the people responsible for the fiasco.

CM & Ministers must stop using their executive powers indiscriminately. No expenditure should be allowed without legislature sanction. There is no such contingency, other than managing after effects of natural calamities, which can't be planned and prior budget approval obtained.

Politicians holding responsible government positions should be debarred making irresponsible, fancy and whimsical statements without completing groundwork.

With AP shifting its capital to Amaravati, TS secretariat now has 10 lakh sft against its its present occupation of 4 lakh sft. Other than some modifications here and there, there is no need to waste few hundreds of crores of rupees to demolish and reconstruct new secretariat, citing vaasthu defects. Vaasthu, poojas & religion are personal beliefs and there is no place in government's activities, in a democratic and secular India.

In TS, KCR unveiled so many fancy projects completion of which requires several lakhs of crores and nothing much has happened on the ground. In AP, except Pattiseema LI project, Capital shifting and Amaravati's some progress, rest is ditto. This is not what is expected by Telugu people in both the states.

See the simplicity of Prime Minister of Singapore during Narendra Modi's recent visit.
After speaking at the 37th Singapore Lecture at the Shangri-La on Monday (Nov 23, 2015), Mr Modi was taken on an impromptu tour of Singapore by PM Lee and Madam Ho Ching shared a meal at Komala Vilas, the popular vegetarian restaurant located at Upper Serangoon Road.

   

Business went on as usual on the restaurant's second floor, but the first floor was occupied only by Mr Modi, Mr Lee and Ms Ho during the meal due to security concerns. They were served idli, vadai and the restaurant's famous onion and masala thosai and accompanied by traditional Indian drinks - sweet yoghurt lassi, mango lassi and lime juice. Total bill might not exceed Singapore $ 100.

When will our leaders learn that simplicity is the greatest ornament.

One will always be remembered for simplicity and never for extravaganza.

Also we have a jewel in Indian Politics Mr.Manik Sarkar, CM of Tripura since 1998 known for his simple living and honesty.