However, I will be looking forward to a policy statement on an issue that is holding back the economic growth process—economic infrastructure. Though infrastructure issues should be outside the budget, given the new team and the fact that ever since 1991 the budget has become a policy statement, one is hoping for a strong new focus. These are areas where the government needs to act quickly, else all new initiatives and investments will come to naught.
Power has become a chronic problem. The electricity regulatory authority is already in place and so there can be no reason for not opening up the entire sector to private parties. For the power sector to develop, and fast, distribution must be turned over to private hands. There is no point telling us that it will be done; we want a time-table of when what will be done. The finance minister had talked of transparency in the budget procedure—we shall look forward to such transparency even after the presentation of the budget. If the state electricity boards refuse to be de-politicised, why not let private parties compete with them in distribution? Look at telecom and how MTNL and BSNL have suddenly become consumer-friendly. Or consider the services provided by the public sector banks after private banks came in.
Similar boldness has to be shown in urban development. India has a very slow process of urbanisation. Often, the only differences between cities and villages are the badly paved roads, pollution, squalor and crime in cities. It is time to think radically on urban development. Private parties must be allowed to develop land and the government should be strictly disallowed. Government involvement in real estate is at the heart of corruption in the civic bodies.
Rural infrastructure is severely neglected. While some rural roads are getting built, there is a severe lack of irrigation canals, road connectivity, availability of power, etc, in most villages. Perhaps this budget will look more closely at rural development through rural industrialisation and growth in rural infrastructure.
One may question the logic of discussing these things in the budget, which is just an annual book-keeping exercise. One lesson we’ve learnt is that political compulsions destroy the sincerest resolves. The finance minister can help solve this problem by announcing publicly that separate funds will be created for these, with continuous additions through special tax collections. The government will not be allowed to dip its hands into these except to use it for the purpose they were intended. This is one of the major reasons why our road construction is progressing so well, the organisation and the persons in the National Highways Authority of India being the others.
What Should Be Done
- New policy, strong focus on infrastructure
- Set time-table for power sector reform. Privatise distribution.
- Create separate funds for different sectors. Find them with special levies. After all, it worked with highways.
