During her recent press briefings , Smt Sitaramanji announced
an ECONOMY STIMULUS PACKAGE of Rs 20.97 lakh*crore
But , it would be incorrect to call it an ECONOMY STIMULUS
PACKAGE , since allocation for “ job-generating “ INFRASTRUCTURE PROJECTS , was
only Rs 1.4 lakh crore !
Rest was more
in the nature of a RELIEF to individuals by way of CASH and some support to businesses
to avoid winding up
When asked by a journalist , how Government plans to raise
funds for this ambitious outlay , Smt Sitharamanji said :
“ We are borrowing – we will continue to borrow from the
market “ [ approximate words ]
Obviously, she could not say :
“ We will tax the rich taxpayers , some more “
My guess is that , out of the total of Rs 6 lakh*crore of
PERSONAL INCOME TAX revenue , those Super Rich , probably contribute no more
than Rs 1 lakh*crore !
Raising their tax-rate by 100 % , would fetch , may be an additional
, Rs 1 lakh*crore !
Peanuts compared to the funds required for the following (
mostly, incomplete ? ) mega-projects :
Ø
Mumbai – Nagpur Super Expressway ……………………………………. Rs 46,000 crore
Ø
Ahmedabad – Mumbai Bullet Train …………………………………….. Rs 108,000
crore
Ø
Shri Shivaji Maharaj Statue …………………………………………………… Rs
3,644 crore
Ø
Mumbai Trans Harbour Link ……………………………………………………
Rs 14, 262
crore
Ø
Amaravati Capital City ( Andhra ) …………………………………………… Rs
109,000 crore
Ø
GIF-Tec City ( Gujarat ) ………………………………………………………….. Rs
140,000 crore
Ø
Navi-Mumbai International Airport ( NAMI ) …………………………..
Rs 112,000 crore
Ø
Delhi – Mumbai Trade Corridor ……………………………………………… Rs 630,000 crore
Ø
Central Vista Project ( Delhi ) …………………………………………………. Rs 20,000
crore
---------------------------------------------------------------------------------------------------------------------------------
Ø
TOTAL ……………………………………………………………………………………
Rs 21.90 Lakh*Crore
-----------------------------------------------------------------------------------------------------------------------------------
And this is only a partial list . For a better understanding
of what we are facing, read :
Ø Centre
resolves 615 infrastructure projects worth Rs 22.35 trillion …………………[
24 June 2019 ]
Ø Infra
funding requirement pegged at ₹111 lakh crore during
2020-25 ……………..[ 29
April 2020 ]
This must be looked in the following context :
Ø
If our expected GDP was $ 2.9 trillion ( $ 2920
billion ) for 20-21 , that would work out to $ 8 billion ( Rs 56,000 cr ), PER DAY
Ø
Hence , in past 58 days of lockdown , our GDP
has lost $ 464 billion ( Rs 32.48 Lakh*Crore )
Both, the Centre and the States, are spending huge amount of
funds for fighting Corona crisis
Their reserves have depleted, treasuries are hitting rock
bottom. The end of this crisis is not in sight !
One thing is crystal clear. Capital Spending on
Infrastructure Projects would have to be suspended
With dwindling revenues from taxes ( direct + indirect ), States – and Centre – will not have , even
enough money for Revenue Expenditure ( salaries etc )
And if there are no Infra Projects, how will economy revive
? How will jobs get generated ?
Not through MGNREGA
During her press brief , talking about MGNREGA, Smt
Sitharamanji said :
Ø
Additional allocation of Rs 40,000 cr , will
generate 300 crore MAN-DAYS of work
Ø
Therefore, earlier / original allocation of Rs
60,000 cr , could provide 450 crore MAN-DAYS
Ø
A total allocation of Rs 101,000 cr giving , 750
cr MAN-DAYS
Ø
Now , MGNREGA promises 100 Man-days / year / to
Rural – Unskilled – Unemployed
Ø
Hence, this works out to providing work to 7.5
crore workers only ( in rural areas )
Will Centre approach
World Bank – IMF – Asian Development Bank etc for Rs 111 lakh*crore ?
With dozens of poor countries approaching these institutions
for funds, India cannot expect much help from them
Whatever is given, will carry stringent conditions ( for “ Ease
of Doing Business “ reforms ? ) –
besides untenable “interest rates /
repayment terms “
If there ever was a time to put BLACK MONEY to productive
use – to revive Economy and generate jobs , that time is NOW !
To undo the ravages of the TINY VIRUS , what we need is an
ELEPHANT !
To be precise , ELEPHANT BONDS ( modified as suggested by me
), as outlined in :
Congratulations,
Shri Surjit Bhallaji, ………………………………….[
31 Oct 2019 ]
Dear Madam Sitharamanji,
Times of extreme calamity demand “ unorthodox and
out-of-the-box “ solutions
Reducing
Repo Rate from 4.4 % to 4.0 % ( as announced a few minutes back by RBI
Governor , Shri Shaktikant Das ), is no
more than applying a BAND-AID to a likely fatal wound !
If you announce ELEPHANT BONDS right now, no one will
misunderstand
No one ( including Experts / Economists / Opposition leaders
) will criticize your announcement because none of them have anything better to
offer !
With regards,
Hemen Parekh
hcp@RecruitGuru.com / 22 May
2020
No comments:
Post a Comment