Never waste a crisis

April 15, 2020

By Gopal Krishna Agarwal,

India is doing a commendable job in fighting the Covid-19 pandemic. It took the epidemic seriously unlike some other countries when it emerged on the global horizon and has generally been ahead of the curve. Whether it’s screening of international passengers, quarantine or announcing lockdown, the central government has never been found wavering or hesitant.

The first priority obviously is to save people from this virus. The lockdown was announced when the cases were still very few. It reduced the speed of the spread of the virus and gave the government time to set up the required health infrastructure. Then the focus of the government shifted to mitigating the hardships of the people due to the lockdown. And now, rightly so, the focus is gradually shifting to the health of the economy.

It is an understatement to say that the economy has been severely affected by the lockdown. The global economic engine has come to a sudden stop because of the pandemic, as one country after another declared lockdown. The Indian economy, which was on a recovery path after a slower growth phase, has been brought down to its knees.

Covid-19 is a non-linear and uncertain event. Proper action at the right time alone will ensure that the cost of recovery is not huge. The likelihood of post-Covid-19 recovery being a V-, U-or L-shaped curve will depend on the road map ahead. The gov- ernment intervention will be commensurate with the severity of the global recession. India’s strengths are its demography, democracy and demand and while the first two will remain unaffected by the crisis, demand will diminish due to economic uncertainty, job losses and financial problems. Therefore, post Covid-19, the government will focus on reviving the demand.

The business of SMEs and other small enterprises are disrupted in a major way. In the absence of public social safety measures, compelling the private sector to bear its cost is not justified. There already is a twin risk aversion in the credit market for the SMEs. Credit guarantee schemes have to be made more robust and the government will have to actively consider sharing some part of the credit risk. Though, availability of credit is not the only – issue for the SMEs, going concern and business – continuity plans require a strong balance sheet which is missing among the SMEs.

The trend of de-globalization, which started after the global financial crisis and gained strength after the 2016 US elections, is expected to accelerate. The world will see the reshaping of international relations. Non-economic dimensions will become more important as countries try to become self-sufficient. However, countries will not return to autarky as no country can be fully self-sufficient in the present era. Though India will try to be self-reliant in critical products, that will not be achieved merely by increasing import duties – global competition is an important factor in boosting domestic productivity.

The shutdown in China due to the Covid-19 out- break was a rude shock for countries. It highlighted their vulnerability due to dependence on one country. A number of multinational corporations are working on a risk diversification strategy, but India will not automatically benefit from such a shift out of China: The success of Bangladesh and Vietnam over India is a sobering reminder. Old rulebooks that hamper private initiative will have to be scrapped by the government.

The government can formulate a new National Manufacturing Policy to make manufacturing in India competitive. The cost of doing business is very high compared to other countries. The cost of compliance, logistics, power, land and so on are very high. This is the right time to undertake factor market reforms, particularly land and labor. The crisis has also shown the importance of migrant workers in keeping the wheels of the economy moving. Going forward, we need a large infrastructure set-up for migrant workers so that the events of mass exodus do not reoccur.

The crisis has brought in sharp focus the aspect of state capacity. Our private sector has immense potential and in times of crises such as the present the government will need to have in place a mechanism to rope in the private sector to augment the state capacity. The use of big data and artificial intelligence (AI) for good governance, policies and welfare programmed can bring massive improvement in state capacity. India’s earlier digital story based on Aadhaar is very different from that in the US and China, and has set an example for the world. Using Al to identify critical areas for government intervention and scenario planning have the potential for huge application in better execution of schemes, predicting natural calamities, agricultural output and so on. India has the talent to do it.

The lockdown will be lifted in a staggered manner and after detailed planning and a standard operating procedure. With inflation remaining under control and lower oil prices benefiting India, the Centre may use special provisions under the Fiscal Responsibility and Budget Management (FRBM) Act to go for a one-time off-balance sheet borrowing with a declared timeline. The borrowing limits on states under the FRBM Act may have to be relaxed for the time being.

Reviving demand, increasing liquidity and big- ticket reforms is the road map. India is fighting the current crisis with all its might and we will set the path for other nations to follow.

The author is national spokesperson of the BJP for economic affairs

Budget 2020 – Sabka Saath, Sabka Vishwas, Sabka Vikas

February 13, 2020

This is an Epoch-making Budget 2020. Finance Minister Nirmala Sitharaman has kept in mind all the segments of the economy. It enforces Prime Ministers Shri Narendra Modi’s vision of achieving 5 trillion dollar economy by 2024, with Sabka Saath Sabka Vikas.

The Government has not bogged down by the resource constraints and has continued with its spending on infrastructure and asset creation. It has taken care that the social welfare schemes of the government have sufficient funds allocation and can continue on its path of benefit to the last man (Antyodaya). Though the fiscal deficit targets have been relaxed the government gives a fiscal consolidation path and has also, for the first time, annexed a list of off-budget borrowing in the budget document and settled a very significant debate about transparency in government borrowing. All previous governments had been resorting to off-budget borrowing like oil bonds etc. but were not disclosing it. FM has estimated a nominal GDP growth rate of 10 per cent for the coming year, keeping inflation below 4 per cent our real GDP growth will be above 6 per cent.

The budget focuses on wealth creation and pro-business policy talking about minimal government intervention under the Economic development Theme of the Budget. For resource generation, it has desisted from increasing direct or indirect taxes. The government has reiterated its commitment to recognizing and honouring honest taxpayer and is taking care of unwarranted harassment by a tax authority by bringing accountability in the tax administration. Announcement of Taxpayer’s Rights Charter within the statute is an important step in this direction. Provision for statutory taxpayer’s right exists only in three other countries worldwide.

Direct personal tax slabs have been changed to benefit middle-income segment and taxpayers up to income level of Rs 15 lakh will be benefited if they opt for a new regime of personal tax. FM has also promised that many tax concessions enjoyed currently by individual taxpayers will be incorporated in the new regime also depending upon nature, the option can be revised by the taxpayers on a yearly basis. Deposit insurance for the scheduled banks has been increased to Rs 5 lakh from the current level of Rs 1 lakh only per depositor, about which there was very little awareness amongst the general public. This will help in building more confidence in the banking industries, bringing transparency.

Cooperative sector gets the benefit of lowering of tax structure as in the case of reduced taxes for the corporate sector, helping farmers’ producer organisations, milk cooperatives and other charitable institutions operating under a cooperative structure. Even registration for charitable organisations under 80G and 12A has been made online provisionally so that they face less harassment and can start their activities early.

The agriculture sector has been sufficiently provided for with the 16 new initiatives announced under Aspirational India theme for rural and agriculture sector. Financial market’s long-pending demand for the abolition of dividend distribution tax (DDT) has been accepted. Stressed assets under MSME has been given an extended one year time period for resolution and limit to go to resolution mechanism has been reduced to Rs 100 crore from earlier Rs 500 crore. The tax audit requirement has been increased to a turnover of Rs 5 crore. MSME also meets its demand for invoice financing under TReDS. Startup ecosystem gets several hand-holding supports like payment of taxes for ESOPs only at the point of sale. GIG economy, involving technological development, gets a big push from the government. Education sector seas several reforms for connecting academic to industries, providing them with industrial internship and skilling etc. setting of online educational facilities and new Police and Cybercrime University are an important development. Employment through National Recruitment Agency for non-gazetted posts will smoothen the employment process and make it completely transparent.

Under the theme of Economic Development, the government provides for all the important sectors like Technological Textile Centres, power, renewable energy, connectivity like airports, seaports and railways. Finance minister works out a mechanism for the ambitious plan of investment of Rs 103 lakh crore under National Infrastructure Pipeline (NIP) identifying 6500 projects through Center, State and foreign direct investments (FDI). Government has also opened up its bond markets for foreign sovereign debt investment in rupee denomination, securing against exchange fluctuations, a concern shown earlier for sovereign debt funds. The budget also provides for gap funding for new hospitals in the aspirational districts for servicing Ayushman health care scheme and provision for drinking water. Under the GST announcement, the government has provided for its commitment to compensate the states for increased 14 per cent revenue every year through compensation cess.

Government has also taken care of inverted duty structure that has seeped in the domestic industry under the Free Trade Agreement (FTA). It also protects domestic industries from dumping securing domestic industries through clauses like country of origin value addition. Income accruing to NRI in zero-tax countries like UAE will be taxed on income generated in India only, a logical step to fill the gap in taxation.

Discrimination of civil acts under Company Law and removal fear in the corporate sector has been hailed across every section. Faceless appeal provision and Vivad se Vishwas scheme will help to resolve long-pending tax disputes in tax administration and will also release funds for the government. Disinvestment road map will help reduce government dependence of tax revenue and improvement of the primary and secondary bond market will help reduce the dependence of corporate sector on bank finance alone.

Gopal Krishna Agarwal

He is National Spokesperson BJP and has a keen understanding of economic affairs.

Development for all

February 7, 2020

By Gopal Krishna Agarwal,

Budget covers financial, development concerns

The Centre has not been bogged down by the resource constraints and has continued with its spending on infrastructure and asset creation. It has taken care to ensure that the social welfare schemes of the government have been allocated sufficient funds and are able to continue on their path of benefit to the last man. Though the fiscal deficit targets have been relaxed, the government has mapped out a fiscal consolidation path, annexed a list of off-budget borrowing, and settled a very significant debate about transparency in government borrowing. The Finance Minister has set a nominal GDP growth rate of 10 per cent for the coming year, a 4 per cent inflation target and a 6 per cent real GDP growth target.

The Budget focuses on wealth creation, but for resource generation, it has kept away from increasing taxes. The government has reiterated its commitment of recognising and honouring honest taxpayers and taking care of unwarranted harassment by the tax authority, bringing accountability in the tax administration. The announcement of the incorporation of the taxpayers’ rights charter within the statute is an important step in this direction. Such a provision for taxpayers’ rights exists only in three other countries worldwide.

Direct personal tax slabs have been changed to benefit the middle-income segment. Deposit insurance has been increased to 5 lakh to help build more confidence in the banking sector.

The agriculture sector has been sufficiently provided for in 16 initiatives announced under the ‘Aspirational India’ theme.

The financial market’s long-pending demand for the abolition of the dividend distribution tax has been met. Stressed assets under MSMEs have been given a one-year extension for resolution. The startup ecosystem gets several handholding measures, such as allowing for payment of taxes for ESOPs only at the point of sale.

The education sector saw several reforms for connecting academics to industries, providing them with industrial internships, online education facilities, and a new ‘police and cybercrime university’. Employment through the national recruitment agency will streamline the process and ensure transparency.

Under the theme of economic development, the government provides for all the important sec tors, like technological textile centres, power, renewable energy, and for connectivity through airports, seaports and railways. The Finance Minister has worked out a mechanism for the ambitious plan of investment in the 103-lakh crore National Infrastructure Pipeline (NIP), identifying 6,500 projects.

The Budget also provides for gap funding for new hospitals in aspirational districts for servicing the Ayushman Bharat healthcare scheme.

The government has also opened up its bond markets for foreign sovereign debt investments, in rupee denomination to secure against exchange fluctuations, a concern shown for sovereign debt funds.

The government has also addressed the inverted duty structure that has seeped into the domestic industry under free trade agreements. It also protects domestic industries from dumping and clauses like value addition. The cooperative sector saw a lowering of taxes, similar to the corporate sector. Measures to remove discrimination and removing fear in the corporate sector have been hailed across every section. The faceless appeal system, disinvestment roadmap and improvement of the primary and secondary bond markets will help reduce dependence of corporate sector on bank finance alone. MSMEs’ demand for invoice financing under TReDS has also been met.

The writer is national spokesperson of BJP on economic affairs

Road to $5 trillion

June 11, 2019

If we are concerned with the economic well-being of the nation, we have to focus on economic growth. Setting a target and working on a roadmap to reach it is the only way to success, and who knows this better than Prime Minister Narendra Modi. In 2014, when Modi came to power, he set up a performance matrix, which seemed far-fetched, but his tireless efforts hit the bull’s eye.

He has caught the bull by the horn on issues such as NPA, corruption, leakages and cleanliness; and effective solutions like the insolvency and bankruptcy code (IBC), GST, demonetization, Jan Dhan accounts and Swachh Bharat Abhiyan have given confidence to the electorate that nothing is impossible — “Modi hai to mumkin hai”.

That spirit continues. For many who believe that India becoming $5 trillion economy by 2024 is a sweet dream; wait, we have the roadmap. Finance Minister Nirmala Sitharaman has unleashed it in her maiden budget. The budget is a vision document of the government. It is a major policy statement. In her budget speech, the FM said “it took 55 years for our economy to reach $1 trillion… Our economy was at approximately $1.85 trillion when we formed the government in 2014. Within five years it has reached $2.7 trillion. Hence, it is well within our capacity to reach the $5 trillion in the next few years.”

The Economic Survey has laid down the parameters for achieving this target. It has mentioned that issues like job creation, savings, consumption, demand, should not be looked at in silos. The CEA has said that with the current 7 per cent GDP growth rate, if we accelerate investments and target 8 per cent growth, the $5 trillion economy is well within sight. Investment is the key; others will follow. We will get out of the vicious circle of low liquidity, low demand, low investment, low production and lower growth to the virtuous cycle of investment, savings, production, consumption, demand and growth.

The government has continued its push for infrastructure development so that ease of living is continuously upgraded, with a focus on rural roads, waterways, and low cost housing. The Pradhan Mantri Awas Yojana alone has set a target of building 1.95 crore houses. The government has also allowed an additional deduction of Rs 1.5 lakh for interest payment of housing loans.

A lot has been announced to promote private higher education under the “Study in India” initiative, and building world class institutions and also sports universities under Khelo Bharat.

The government has also announced opening up of the sovereign debt market. Those who doubt the government’s intention can draw comfort from the fact that this will help the government swap high-cost domestic debt for cheaper international credit, thereby helping to reduce interest rates.

The banking sector has seen many reforms in last five years. Further, to help private capital formation, the government has promised Rs 70,000 crore of fresh capital infusion into public sector banks. It will also set up development financial institutions to support long-gestation projects and tackle the asset-liability mismatch. To boost consumption and resolve the NBFC issues, the government has guaranteed 10 per cent of loss on assets pool purchases to the tune of Rs 1,00,000 crore from NBFCs.

At present, the private sector is largely over-leveraged, and is under pressure to resolve its debts and is short of capital. For capital formation, the government has to depend on foreign capital and, therefore, is continuing with its policy of liberalizing FDI, particularly into insurance, aviation and single brand retail segment.

MSMEs have also has received special allocation by the government; to support manufacturing, the government has announced streamlining 55 labour laws into four codes and enhancing minimum wages. Small traders with turnover up to Rs 1.5 crore will get the benefit of a pension scheme.

The government has reduced the corporate tax to 25 per cent for small enterprises with a turnover up to Rs 400 crore, and has announced several measures to boost the start-up ecosystem. To continue with the benefits of this provision, it is expected that it will not be misused by the beneficiaries as is done at times under capital gains tax, dividend distribution tax and buy-back of shares.

Modernization of railways is estimated to require about Rs 50 lakh crore of investment. The government has proposed public private partnerships and selective route privatisation to augment its resources. Initiatives like building a national power grid and a warehousing grid will have far-reaching benefits.

For ease of doing business, tax compliance is crucial. The government’s plan to implement e-assessment is a big game changer: It will bring transparency and reduce harassment of tax payers due to subjective human intervention.

The government’s initiative in resolving pending indirect tax litigation through Sabka Vishwas Legacy Dispute Resolution Scheme is commendable. This scheme covers, past disputes and provides relief ranging from 40 to 70 per cent, and also relief on levy of interest and penalties.

With all the constraints on expenditure, the finance minister has allocated funds across various social segments. The budget has increased funds allocated to central sponsored schemes by 8.8 per cent to Rs. 3, 31,610 crore. The total expenditure of the government has increased by 13.4 per cent from the revised estimates. The fiscal deficit has been kept under check at 3.3 per cent of GDP. The budget meets the demand for investment and growth without disturbing the fiscal math.

It is not redistribution but growth that matters. The prime minister has rightly said that we have to increase the size of the cake. Economic growth is our target and the focus on empowerment of the weaker sections of the society though education, healthcare etc. is the solution.

Identification And Resolution of NPA; Regarding Strength of Our Banks

March 8, 2018

Narendra Modi is carrying out economic reforms in the short time available to him and rebuilding a transparent and corruption free business ecosystem, destroyed by crony capitalism under the UPA. The benefits of his decisions will be slow and realized in the years ahead.

In 2014, we inherited feeble macroeconomic parameters in the form of high inflation, slow GDP growth and a weak financial ecosystem. Over the years, the nexus of politicians, financial institutions and corporate world had weakened the foundations of this structure. And, without resolving these issues, we could not have progressed.

There was no middle ground. Either we compromised and continued as such, or demolished the edifice of corruption and built a new structure. Prime Minister Narendra Modi chose the second. The pain was real but so was the malaise.

With unidentified NPA and no surety of what lay beneath the carpet, the job was tough and not for the faint hearted. Even now, the estimated NPAs are of about Rs. 9 lakh crore. Yes, there was scope for a minor deviation, but that wouldn’t have been enough. Instead, with adequate provisioning and sufficient liquidity due to recapitalization, the government has managed to put banks in a position to tide over the crisis.

To understand this better, we must know that NPA has three components. Firstly, there are genuine failures arising out of business risks. Secondly, there’s a large chunk of over leveraged loans. And thirdly, a whole lot of fraud is perpetrated by miscreants in the banking system. Once the gross NPA has been identified, government has to deal separately with each of these three components.

Genuine failures need hand holding and formulation of an exit policy. Fraud requires investigation and penal actions on the criminals, apart from strengthening the control and audit mechanism. Finally, bad quality loans and substandard assets need a very careful resolution so that the confidence in the banking institution is not jeopardized, and the money is recovered.

With new legislation such as the Insolvency and Bankruptcy Code, and the resolution mechanism under NCLT in place, the banking sector now has the teeth to bring fraudulent corporate houses to book.

The current banking crisis has its genesis in the UPA regime. The previous government had ignored the existence of NPA and brushed the problem under the carpet. Finally, Prime Minister Modi took the challenge head on and tried to resolve it.

A big opportunity waiting to be tapped

September 20, 2015

By Gopal Krishna Agarwal,

With slightly over 20 million demat account and around 5 million retail investors, there is a humongous opportunity waiting to be tapped. This not only makes business sense, but is also in the interest of our country where investment needs are mind-boggling. It is time for the discount broking firms to join other industry players to work for increasing the size of the market.

Discount brokerage is only around five years old in India, while it has been around for over two decades in the more advanced financial markets like the US, where it continues to exist with the traditional broking firms. Although the emergence of discount broking has not rung the death knell for traditional brokerages or full-service broking firms yet, it has been causing a lot of anxiety to the market participants. Investors in every market are mostly swayed by the price and cost transaction, but there are also discerning buyers who don’t mind paying a higher price, provided the value proposition is right As the term itself suggests. The USP of discount broking is its extremely low rates of commission. As far as services are concerned, it offers none, except trade execution. Full-service broking firms, on the other hand, offer an entire gamut of services, ranging from research reports and trading inputs to financial planning and wealth management. Therefore, both cater to two different segments of the market.

Discount broking is meant to attract day traders who, otherwise, end up paying high brokerage on their trades. It also attracts more enterprising investors who, like the day traders, do their own research before investing. With the explosion of mass media, multiple sources of information are available to investors, mostly free. So, they are no longer dependent on brokers for information to guide their buy and sell choices. Such investors, however, are few and far between.

Investors who cannot follow financial markets either due to lack of time or skill would continue to remain with the full-service broking firms, as they depend on their research, recommendations and trading tips, since they mostly follow the buy-and-hold philosophy. Traditional brokers also retain the advantage of human factor. Investment in equities is complex and a little handholding is always welcome. Hence, a large number of investors prefer investment advisers with whom they can talk and interact. The traditional broking firms will deal with the emerging competition with discount brokers by either moving up or down the value chain. One way to deal with it is to unbundle the services and offer them accord- ing to the prospective client’s willingness to pay. Thus, within the same broking outfit, one can either opt for discount broking or a more premium service, where brokerage is bundled with research or market reports. We are already seeing this happening

Since the traditional firms will only be able to charge a higher brokerage for value-added services, their quality of research is likely to improve, which, in turn, will also upgrade the overall resilience and quality of information in the market. Some of the smaller brokerages whose research reports are not worth the paper on which they are printed would either have to improve their quality drastically or downgrade to discount broking. This might also lead to consolidation in the broking industry, as with falling margins and increasing compliance and regulatory cost, firms would try to achieve a certain size to reap the economies of scale. So, before discount broking and the accompanying cut-throat competition becomes a menace, market regulator Securities and Exchange Board of India (Sebi) should relax the norms governing the merger and acquisition of broking business to help the industry to consolidate. Even the exchanges need to do a lot with regard to fees, while the government must change the several tax laws to facilitate mergers and acquisitions

We believe that following Iite approach, Luddite think this matter is in nobody’s interest. We work in the equities market where the investors reward enterprises that do well and penalise that don’t So, to demand any kind of restriction on discount broking runs against the basic philosophy of the stockbroking business. So, no matter how much we insist on curbs, the desired results will not be achieved in a free market scenario.

It is for this reason that the Association of National Exchanges Members of India (ANMI) had reservations regarding the demand of a regulation on minimum broker age. It is likely that some of the traditional broking firms might perish in the face of this new challenge, but then, more efficient and innovative firms would replace them. This is the perennial gale of creative destruction that Joseph Schumpeter so eloquently talked about

It is pertinent to note that the cost of brokerage has never held back investors from the equity market, and to expect that discount broking will usher in equity culture in the country is completely misplaced.

With slightly over 20 million demat account and around 5 million retail investors, we have not even scratched the surface properly; there is a humongous opportunity waiting to be tapped. This not only makes business sense, but is also in the interest of our country, where investment needs are mind-boggling. It is time for the discount broking firms to join other industry players to work for spreading financial literacy and increase the size of the market.

The relentless march of technological advancement brings with it changes, some of which are disruptive in nature, but the human effort has always been to rise up to it. When the settled way of things change abruptly, there is fear of the unknown and even some overreaction, but then that is not wholly unexpected. This is not the first time that there has been a major shift in the way business is done in the stock market. We have covered a long journey from meeting under the banyan tree in Mumbai to hiding behind computer screens and executing trades at the speed of light.

Gopal K Agarwal is national convener of the BJP economic cell.

भूमि-अधिग्रहण का सच एवं भ्रम

April 1, 2015

गोपाल कृष्ण अग्रवाल,

आर्थिक मामलों पर भाजपा के राष्ट्रीय प्रवक्ता

भूमि अधिग्रहण विधेयक को लेकर विपक्षी दलों ने देशभर में जो माहौल बनाया है उससे भ्रम अधिक फैला है। जबकि सच्चाई दब कर रह गई है।

भूमि अधिग्रहण संसोधन विधेयक पर विपक्ष के तेवर उक्रामक हैं। उनका दावा है कि वर्तमान संशोधनों से इस विधेयक का स्वरूप किसान विरोधी हो जाएगा। ध्यान होगा कि जब भारतीय जनता पार्टी ने एक अध्यादेश के तहत दिसंबर 2014 में संशोधन लेकर लाई थी तो चारों तरफ इसका विरोध हुआ था। इसी को ध्यान में रखकर यह बताना आवश्यक है कि अध्यादेश लाना कानूनी अवश्यकता थो। ‘भूमि अधिषहण विधेयक 2013’ में एक क्लॉज था, जिसके तहत 13 पूर्व ऐक्ट ऐसे थे, जिन पर नवा भूमि अधिग्रहण कानून लागू नहीं होता। इसलिए उन 13 कानून के बहत अधिग्रहित की गई भूमि पर मुआवजा पुराने दर से ही किसानों को मिलता, यदि उसको 31 दिसंबर, 2014 तक इस नए कानून के तहत नहीं ल्या जाता। नए कानून कानून के तहत किसानों को ज्यादा मुआवजा मिले, इसके लिए अध्यादेश लाना जरुरी या। अध्यादेश के बाद जन संशोधन विधेयक संसद में लाया गया तो हर जगह इस पर तीखी प्रतिक्रिया हुई। यह कहा गया कि यह संशोधन किसान विरोधी है। जबकि स्थिति ऐसी नहीं है। जो भ्रम फैलाया गया, उसे दूर करने के लिए भाजपा ने छह सदस्यीय भूमि अधिग्रहण समिति का गठन किया। किसान संगठनों के प्रतिनिधि और सीधे किसानों से मुलाकात कर समिति ने एक रिपोर्ट थी।

इसके बाद सरकार ने संशोधन विधेवक में कुल नौ संशोधन पेल कर लोकसभा में पारित करवाए। समिति ने रिपोर्ट में कुछेक व्यावहारिक समस्याएं गिनाई थीं। दरअसल, देश की 60 प्रतिशत से अधिक जनता खेती पर निर्भर है, जिसकी देश की सकल घरेलू उत्पादन में मात्र 13 प्रतिशत भागीदारी है। पू-स्वामी की औसत भूमि कर पट्टा बहुत छोटा हो गया है, जो व्यापारिक खेती के लिए पर्याप्त नहीं है। इन सब लोगों को वैकल्पिक रोजगार के संसाधन ढूंढ़ने पढ़ेंगे। साथ ही यदि इनको भूमि की कीमत सही नहीं मिली तो परिस्थिति विफ्ट हो जाएगी। अधिग्रहण से कम से कम उसका मूल्य ठीक-ठाक मिल जाता है। साय हो जिस क्षेत्र में आधारभूत ढांचे का निर्माण होता है, उसके आस-पास की भूमि के दाम भी बढ़ जाते हैं। यह समहाना होगा कि भू-अधिग्रहण के बाद ही तो देश के सभी कोने में आधारभूत संरचना को तैयार किया जा सका है।

अगर इन संशोधनों को हम बारीकी से देखें तो पता चलेगा कि लोगों की चिंवा भूमि अधिग्रहण कानून में भू-स्वामी की सहमति से जुड़े एक क्लॉज को लेकर थी, जिसे भाजपा ने हटा दिया। भूमि अधिग्रहण बरनून 2013 के बारे में सभी की मान्यता है कि यह किसानों के हित में है। यह जानना आवश्यक है कि उसमें भी सरकारी परियोजनाओं के लिए भू-स्वामी की सहमति का बलॉज नहीं था। केवल दो प्रकार के अधिग्रहणों के लिए किसानों की सहमति की बात थी। पहला अगर सरकार पब्लिक प्राइवेट पार्टनरशिप (पीपीपी) परियोजना के लिए भूमि अधिग्रहित करती है तो 70 प्रतिशव भू-स्व्वामियों से सहमति लेने की आवश्यकता थी। अगर सरकार किसी प्राइवेट परियोजना के लिए भूमि अधिग्रहित करती है वो 80 प्रतिशत भू-स्यामियों की सहमति की जरूरत थी। इसके अतिरिक्त यदि सरकार अपने लिए लगभग नौ क्षेत्र की परियोजनाओं में किसी भूमि पर अधिग्रहण करती तो उसमें सहमति वाले क्लॉज नहीं थे। यह अधिधाहण सरकारी परियोजना के लिए था, जिसमें किखनों की सहमति की आवश्यकता नहीं थी। पुराने कानून के नौ क्षेत्र जिसमें सहमति जरूरी नहीं थी, उसमें अब सरकार ने केवल पांच आवश्यक क्षेत्रों को रखा है।

बगैर सहमति के भूमि अधिद्याहित किए जाने वाले जो पांच क्षेत्रों को जोड़ा है, उसमे आधारभूत संरचना, औद्योगिक क्षेत्र के विकास जैसे को शामिल किया गया है। इसमें सरकार ने कहा है कि औद्योगिक क्षेत्र के दोनों तरफ एक-एक किलोमीटर से ज्यादा क्षेत्र अधिग्रहित नहीं किया जाएगा। ‘पीपीपी’ परियोजना में भूमि का स्वामित्व सरकार के पास ही रहेगा, उसमें भी सामाजिक ढांचागत परियोजनाओं के लिए भूमि अधिग्रहित करने का अधिकार सरकार ने अपने पास से हटा लिया है। निजी अस्पताल और निजी शिक्षण संस्थाओं के लिए भूमि अधिग्रहित नहीं की जाएगी। वे सुझाव हमें मिले थे, जिसे सरकार ने माना भी है। मुआवजे की रकम मिलने में वर्षों लग जाते हैं, ऐसी समस्या भी सामने आई। इससे निपटने के लिए जिला स्तर पर समाधान केन्द्र स्थापित करने की यात को सरकार ने माना। इस तरह ज्यादातर सुझावों को सरकार ने मान लिया है। जब इस बिल को लोकसभा में आया गया था, तब राष्ट्रीय जनतांत्रिक गठबंधन के कुछ घटक दान भी इसके पक्ष में नहीं थे, लेकिन उनके सुदयवों को शामिल किया गया। मुझे लगता है कि राज्यसभा में आने तक राजग के घटक इसके पक्ष में तो आ ही जाएंगे। अन्य राजनीतिक पार्टियों को भी सरकार के साथ आना चाहिए। ऐसे गंभीर मसले पर राजनीति साधना ठीक नहीं है, क्योंकि इससे देश का विकास बाधित होगा।

Need for a strong political leadership

August 22, 2010

CA GOPAL K AGARWAL

gopalagarwal@hotmail.com,

INDIA has the potential to emerge as a superpower. But simply having potential will not help achieve the goal There can be mired factors which are acting like bottlenecks towards achievement of this goal.

Emergence of strong nation requires collective will or what is called ‘a can to do spirit”. But to build this momentum what we require is identification of these bottlenecks and take corrective measures to remove them. In Upanishads it is said that to achieve success we need to “Investigate carefully, decide correctly and follow faithfully”.

According to me the most important constraint that India is facing is weak political leadership. There are so many factors where India needs course corrections. These factors are not far to find. Anybody, groomed to social life can clearly identify that corruption; caste politics, violence, lawlessness, terrorism, etc are acting as a parasite to the national life. But there is nobody among the present leaders showing any will or determination to fight this menace. The politics of compromise is the name of the game. There is a continuous competition among the parties to capture vote-banks. To capture vote-banks money power, muscle power and even emotions are used.

The attitude to compromise on national issues to fulfill personal ambitions or meet short term political goals is the weakness of our leadership. We are caught up in a vicious circle where a weak leader will further lead to weakness in the leadership.

I don’t want to be sounding negative. We can overcome this attitude. Ultimately everything comes down to simple economic principle of demand and supply. What we need is strong nationalist political leaders.

The second important factor is the lack of complete inner democracy in all political parties. In the name of discipline every political party has thwarted democratic values. Any party, which resorts to inner democratic process, will be able to develop strong leadership among itself. And once we get a strong political leadership we will be able to overcome most of the other constraints. We can then easily achieve a strong and a well developed nation.

Outsourcing equals Globalisation

March 30, 2003

By Gopal Krishna Agarwal,

BUSINESS process outsourcing (BPO) helps in globalising national economies. Outsourcing depends on labour arbitrage and India is considered to be a major beneficiary of the process. In any field where knowledge is involved, it has the potential to become a global giant by leveraging the potential of its English-speaking, tech savvy and cheap manpower in the global market.

India’s IT market has grown from $1.73 billion in 1994-95 to $16.5 billion in 2002-03. The country’s software exports grew at 26 to 28 per cent during the current fiscal year ending March 2004. As if in response to this striking growth, we are suddenly hearing anti-globalisation noises from the West. Legislation has been introduced in the US seeking a clamp down on such outsourcing.

This attempt to ban outsourcing may also be a sign of weakening American confidence in the strength of its dollar. The US has been running up a higher and higher deficit which has crossed half a trillion dollars this year. Earlier, this was being financed by at- tracting global currency reserves. The central banks of nations the world over were keeping their cur rency reserves in dollars, thereby fuelling the demand for that currency. But with the weakening of the dollar, this could change.

Experts in the US realise, how ever, that banning outsourcing can be no solution to the economic and employment crises the nation is facing. Even Alan Greenspan, the chairman of the Federal Reserve, has pointed out that efforts to protect US jobs through legislation could end up damaging the economy. He has stated that if the US opts to erect walls against foreign trade and even discourage job-displacing innovation, it could slow the pace of its economic growth markedly. In any case, US companies have little choice. If they don’t cut costs by outsourcing they will rapidly become uncompetitive, vis-a-vis companies that do, which will result in many more US jobs being lost as an increasing number of these companies will be forced to shut down.

The world outsourcing market is estimated to be about $5 trillion in 2002 according to the – Outsourcing Research Council. Nearly 20 per cent of the total business is constituted by the IT E and ITES market, which is growing at about 15 per cent per annum. Of this, India receives only about 2 per cent of the work generated. This indicates the huge ■ potential it has of future growth. However, in a simultaneous reverse process, some of the best and biggest of Indian companies are outsourcing strategic IT functions to global companies.

Strategic outsourcing is, in fact, the fastest growing segment in the Indian IT markets as seen from the series of deals announced in the last few days. A notable deal struck in the recent past is that between Hewlett-Packard and Bank of India for over Rs 680 crores. It is also clear that global vendors have es- established their expertise and experience, in handling the long-term, complex outsourcing needs of Indian companies to enable business transformation. It is no coincidence that Indian companies are opting for strategic outsourcing at a time when the BPO phenomenon is at its peak. Indian non-IT companies are taking to outsourcing as they are on the lookout for vendors with the best domain knowledge. In simple terms, this is just another manifestation of globalisation.

Several high-profile visitors from the US have told us that India is one of the most closed economies in the world. This is partly an attempt to legitimise anti-outsourcing legislation in their country. The conventional test for gauging openness is tariff structures, on which India scores well as per WTO standards.

Americans were earlier in a position to win competition and control the economies of other nations through monetary policies devised by multilateral agencies like the IMF and the World Bank. When international trade agreements were extended to the agriculture and services sectors, developed nations were not very comfortable since they started losing out to the competition. At that point, they started taking recourse to anti-liberalisation measures like banning outsourcing. But there is a huge contradiction here. The US economy is based on accessing world markets. One cannot ban outsourcing of business process while continuing to access world markets.

The US cannot ban outsourcing while continuing to access world markets

The author is member, Central Economic cell, BJP