Cut inflated govt bills, set example
Union finance minister Pranab Mukherjee, in an impassioned speech winding up the debate on the Finance Bill in Parliament, appealed for suggestions on how to cut down the huge subsidy outgo in compensating the oil marketing companies for selling petrol, diesel, kerosene and LPG below cost price. He mentioned that the Centre and the states would have to take a haircut. This is imperative as the taxes imposed are almost as high as the cost of refining, according to the figures he gave in Parliament.
But it is more important for the governments at the Centre and in the states, the local authorities and semi-government bodies in the states, and the bureaucracy to cut their petrol and diesel bills by a significant amount, say 40 to 50 per cent. This would not only cut down consumption of fuel, misuse of official cars on so-called “tours” and driving families for shopping and to schools, but also pare government expenditure significantly. A big haircut in the bills of the protocol departments of the Centre and the states alone would be a significant saving of both fuel and government expenditure. The government needs to take cues from the developed countries, where Prime Ministers and ministers travel like ordinary citizens, not to mention nearer home the chief minister of Goa who travels by taxi and auto. The people then would not mind the pain.
The government, as we have said repeatedly in this newspaper, needs to bring together all the people and organisations working on alternative sources of energy and set time-bound targets. But the government only hobnobs with chambers of commerce, which have their own agenda, one that is different from that of the masses.
The finance minister also made an impassioned plea for the passing of bills to reform the pension, insurance and banking sectors. One can understand the reluctance of the Opposition and people within the Congress-led coalition to open insurance and banking to foreign investment when you consider that many of these institutions were responsible for the financial troubles in their own countries. The mightiest of investment banks and insurance companies had to be bailed out in the US. There is an understandable fear that these entities would bring their toxic products into India as their overriding agenda, profit, is driven by greed.
While opening up these three sectors would no doubt create an environment that would attract investment, there is an even stronger case to be made for administrative reforms, elimination of corruption at all levels, taking quick decisions, plugging leakages and streamlining the distribution system, all of which would bring in more investment and create a favourable investment climate even for home-grown investors and entrepreneurs. It would also significantly cut down the government’s wasteful expenditure and narrow the fiscal deficit.
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