Category: Welfare schemes

CSR levy – an anathema to free enterprise

In a country where tens of millions persons live in abject poverty, suffer from acute malnutrition, live in unhygienic conditions and don’t get opportunity for even basic education, corporate social responsibility [CSR] is an idea which caught the imagination of the both the dispensations under UPA – II and Modi – 1.0/2.0 . When, a company generates profits using the country’s resources besides relying on the capital and labor provided by the public, it needs to pay back to the society. This may be the underlying logic behind CSR levy. The government expects that a company above a threshold in respect of net-worth, turnover and net profit, should spend a given percentage of its net profit on activities such as...
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Bring transparency to the table

Extra-budgetary resources translate to about 2.3 per cent of the GDP. Had they been included, the FD for 2018-19 would have been 5.7 instead of 3.4 per cent All through its tenure beginning 2014, the Modi Government demonstrated a high degree of sensitivity to millions of poor and downtrodden and spent prodigious sums on providing basic amenities such as affordable housing, electricity, sanitation, toilets, fuel and liquefied petroleum gas (LPG), health care, education etc to improve their lot. In the last five years, it built 1.5 crore affordable housing units and nine crore toilets, gave 2.6 crore and seven crore electricity and gas connections respectively and assured free medical treatment up to Rs 500,000 that covered 10 crore families (or 50 crore...
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Merge all subsidies into DBT

At present, tens of millions persons [including undeserving] are getting a variety of subsidies from the government. These cost hundreds of thousand crore seriously impairing its ability to maintain fiscal deficit [excess of total expenditure over total revenue] within the target range mandated by the Fiscal Responsibility and Budget Management [FRBM] Act. The manner of administering these subsidies is marked by ‘adhocism’ and ‘arbitrariness’. It leads to mis-allocation of resources, promotes inefficiency in production, distribution and use, encourages misuse of funds, makes way for controls through the backdoor, enables bureaucrats to meddle in the affairs of the industry and creates fertile ground for nepotism and corruption. Even as Modi – government has vowed to make India a US$ 5 trillion...
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Funding welfare schemes – make it transparent

Modi – government deserves commendation for showing a high degree of sensitivity to the dire need for improving the living conditions of millions of poor and down trodden – residing in both rural and urban areas – by providing all basic amenities such as affordable housing, electricity, sanitation/toilet, fuel/gas, drinking water, health care, education etc. During the last 5 years, it has built about 1.5 crore affordable housing units, given 2.6 crore electricity connections, built around 9 crore toilets, given 7 crore gas connections and provided free medical treatment for expenses up to Rs 500,000/- [with an intent to cover 10 crore families]. Under Modi 2.0, the government has vowed to reach the target of 2 crore housing units by...
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Modi’s pension plans – benign on the budget

Presenting the interim budget for 2019-20 on February 1, 2019, the then acting finance minister, Piyush Goyal had announced the decision of the government to launch PM Shram Yogi Mandhan [PMSYM] with an intent to provide economic security cover to persons working in the ‘unorganized’ sector in old age. Under PMSYM, a person in the ‘unorganized’ sector and earning less than Rs 15,000/- per month gets pension @Rs 3000/- per month on completion of 60 years age. For this, a worker joining at the age of 29 years contributes @Rs 100/- per month with matching contribution by the centre. A person joining at the age of 18 years contributes @Rs 55/- per month with equal amount by the centre. This...
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Imperatives for a new India

Now that the BJP Government has received mandate for another term, will it will play hard ball and bring the much-needed reforms in crucial sectors? During his first term (2014-19), Prime Minister Modi focussed on governance reforms, cutting bureaucratic red tape, simplifying procedures, expediting approvals and ease of doing business. The Government also spent its energy on effective implementation of welfare schemes, thus ensuring that assistance reaches the beneficiaries in full vide the Direct Benefit transfer (DBT). Now  that the public has given him a resounding mandate to rule for another term, he should crack the whip on long-pending reforms. The key sectors crying for immediate attention include food and fertilisers, oil, gas, power, irrigation, credit to name a few. At present,...
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Bridging fiscal deficit – real or fudged!

In the Union Budget for 2018-19, the finance minister had made an allocation of Rs 170,000 crore towards food subsidy – the amount needed to make subsidized food available to 2/3rd of the population @Rs 1/2/3 per kg for coarse cereals, wheat and rice respectively under the National Food Security Act [NFSA]. The amount is given by way of reimbursement to the Food Corporation of India [FCI] and other state agencies for the excess of the cost of procurement, handling and distribution over the sale price to the beneficiaries under the NFSA. Out of Rs 170,000 crore, Rs 140,000 crore was meant to be given to the FCI whereas, the balance Rs 30,000 crore allocated for other agencies. Of the...
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Where are the funds?

The Congress has assured regular income for the poor but how will it identify the beneficiaries? And won’t the NYAY scheme burden the economy? During its over five decades of rule, the Congress institutionalised the culture of doles in the name of its much trumpeted garibi hatao (poverty alleviation) programme even as majority of the people continued to remain poor. Even Prime Minister Modi continued with doles but changed the narrative with a pledge to empower the poor, create jobs and increase their income to ensure that these benefits reached the beneficiaries in full. Besides, under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, his Government is giving Rs 6,000 per year to 120 million small and marginal farmers. With general elections...
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Congress’ NYAY scheme – recipe for fiscal disaster

Prior to Modi taking charge in 2014, the grand old party viz. Congress which ruled the country for over five decades, had institutionalized the culture of giving subsidies/doles, loan waivers, free power, job guarantee [in rural areas] and so on. It had also achieved the dubious distinction of institutionalizing corruption and leakages from the budget earmarked for welfare schemes. With a major slice of funds pilfered on the way and not reaching the intended beneficiaries, majority of the poor remained in a state of poverty and deprivation. This also left little money for undertaking development projects by the state. So, the economy was caught in a vicious trap of doles-corruption-slow growth with no space whatsoever for increasing job opportunities and...
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‘Dole-deal’ versus ‘fair deal’

Addressing the India Today Conclave on March 3, 2019, prime minister, N Modi lambasted the erstwhile UPA – dispensation as a regime that believed in ‘doles’ and ‘deals’ whereas his government believes in ‘empowerment’ and ‘fair deal’. Elaborating on the charge, he opined that under Congress – led/supported governments in the past, even as little was done to empower the poor and augment their incomes, there was proliferation of doles – an acronym for subsidy or any other form of state support – financial or non-financial. A major slice of these doles never reached the intended beneficiaries [as the then, prime minister, Rajiv Gandhi opined ‘of the Rupee 1 that leaves Delhi, 85 paise disappears on the way’]. Moreover, the...
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