Austerity overdue, start from the top
The time for austerity measures — as one of the tools to soften the impact of the depreciating rupee and the burgeoning fiscal deficit on the economy — is long overdue. It is a matter of concern that the “finance ministry has yet to look into what could be done”, going by what finance minister Pranab Mukherjee said lately. The rupee has been depreciating steeply (by nine per cent in the past three months, and by 16 per cent since the beginning of the year); and the fiscal deficit has been burning a hole in the country’s treasury for the past two years. Mr Mukherjee, in charge of safeguarding the nation’s financial health, owes it to India to not only bite the bullet, but also press the panic button without delay.
Charity, as they say, begins at home: the finance ministry should, therefore, immediately stop subsidising LPG cylinders for all members of Parliament, including ministers, as well as ministers and legislators in states. These worthies number around 5,000, and if you take an average of two cylinders per month per person, this alone will amount to a saving of `5 crores per year. The same can be done with their petrol and diesel cars, including their huge cavalcade of escort vehicles. The senior bureaucracy too can be brought under these measures.
Greece and France voted out their governments recently over austerity measures as these did not start from the top. It is a message that should be heard loud and clear by our leaders.
In all this gloom, the flip side of the depreciating rupee should not be allowed to be frittered away. A weak rupee is a boon for exporters — they should swiftly exploit this opportunity to tap new markets — particularly in Burma, parts of Africa and Latin America. Entrepreneurs should be encouraged to indigenise items being imported, such as those coming from China, South Korea and Japan, besides the United States, as the rupee has depreciated significantly against their currencies. It is also a good time for the government to revive its “Incredible India” campaign to attract tourists as India has now become a cheap destination.
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