Economy
Modinomics must address the rural economy
For a government that has been voted by a historic majority on the single promise of "ache din" and "vikas", today's agrarian reality can turn into its most potent cause of demise. The agricultural growth rate is creeping towards negative territory from a dismal 0.2 percent seen in 2014-2015. Data from the labour ministry shows that growth in rural wages slowed from a high of nearly 18 percent in August 2013 and 17.5 percent in August 2014 to a dismal 3.8 percent in August 2015.
 
The government is currently in the dock on an ongoing PIL filed in Supreme Court about its inability to alleviate distress in a time of drought. In this battle, the government's claim to have "transformed" the UPA flagship MGNREGA programme is truly put to test. 
 
It is perplexing to note that in a situation when the rural jobs scheme is best designed to operate, it has been failing - at huge costs to the lives of the poor. 
 
The MGNREGA has been provided with a budgetary allocation of Rs.38,500 crore for 2016-17. Though the allocation was touted to be the "highest ever", the truth appears to be far from that. 
 
After reducing the amount of funds owed to workers and material suppliers - nearly Rs. 12,000 crore at the end of the year - the States are left with Rs.26,500 crore to provide employment on demand in the third consecutive year of drought faced by nearly 50 percent of India's districts. 
 
Given that a MGNREGA worker performs 48 days of work in a year, on an average, and that the average cost of generating one personday is Rs.215 in a non-drought year, a budgetary allocation of Rs.26,500 crore would result in supporting only 2,56,78,294 workers. This translates into the fact that only 24 percent of workers will be provided average days of employment under the programme. 
 
If the intent of a government is indicated by where it allocates its resources, the government has a lot to answer for in this year of drought. 
 
One can juxtapose the stern treatment that MGNREGA allocations have received with the overwhelmingly generous allocation that the government has committed towards implementing the recommendations of the Seventh Pay Commission - Rs.1.02 lakh crore. Adding to this is the enhanced budgetary allocation to defence pensions by nearly 40 percent owing to the government’s decision of accepting the principle of ‘one rank one pension’. 
 
The skewed burden put on the country's fiscal health by these decisions is something that has not surpassed the concerns of the government's chief economic advisor, who states in the Economic Survey 2015-16: “The implementation of the Pay Commission recommendations and the one rank, one pension scheme will put an additional burden on expenditure”. 
 
Though mildly put, the intent of a government to scramble for funds to meet its political commitments, instead of allocating a just quantum of funds to respect the mandate of a legislation that guarantees employment by statute, especially in a drought year, is telling. 
 
As we approach the two-year anniversary of the Modi Government, it is clear that the domestic economy has far underperformed the expectations set out in May, 2014. The global economy is most likely to remain in a low inflation low growth mode for the foreseeable future even as central banks have moved into negative interest rate territory. It is, thus, prudent to focus on the distress in the rural economy to support growth during a period when the investment and capex cycles have failed to pick up even after a sharp fall in rates. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Vijay Mallya's passport suspended: MEA

New Delhi : The diplomatic passport of beleaguered liquor baron Vijay Mallya, who is currently in Britain, has been suspended with immediate effect for four weeks, the external affairs ministry announced on Friday.

 

Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

D S Ranga Rao

8 months ago

Digging wells deeper and deeper, well after the house caught fire! Let's see how much ash will be collected.

Rajya Sabha chairman gives nod for JD-U MP's arrest
New Delhi : Rajya Sabha Chairman and Vice President Hamid Ansari has given the CBI sanction to prosecute Janata Dal-United member Anil Sahani, sources said on Friday.
 
The scam relates to reimbursements being claimed against fake boarding passes and bills from the Rajya Sabha Secretariat.
 
Sahani claimed he is being framed.
 
This is the first time a Rajya Sabha chairman has given such a clearance, the Rajya Sabha Secretariat sources said.
 
A CBI official told IANS a charge-sheet in the case was filed last year, and with the clearance from the Rajya Sabha chairman, they will now proceed with "further action" which is likely to be arrest of the MP.
 
Members of parliament or assemblies cannot be arrested without prior permission of the speaker of the Lok Sabha or the assembly or Rajya Sabha or legislative council chairman.
 
While this is the first time that the Rajya Sabha chairman has given such a permission, Lok Sabha Speaker Meira Kumar twice sanctioned arrests, first in 2010 against Congress MP Rajaram Pal in the cash-for-query scam, and second time against BJP MP Ashok Argal in the cash-for-vote case.
 
It was revealed that Sahani and three other accused allegedly used forged e-tickets and fake boarding passes to defraud the Rajya Sabha of Rs.23.71 lakh.
 
Sahani, however, denied the charge.
 
"Under a parliamentary procedure, permission will have to be given. They are saying I took Rs.23 lakh, if I have even 23 paisa in my account I will resign.
 
"It is a conspiracy against me because I raise issues related to poor and Dalit."
 
"I will ask the chairman, I have given all documents and account statements which prove I did not take any money. How is the CBI prosecuting me then?" he added.
 

Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

D S Ranga Rao

8 months ago

A step in the right direction, though not a day too soon. But only one black sheep out of scores and scores of such types? Isn't it like catching a mouse after digging up a huge mountain? What about confiscation of assets of the accused now that a charge sheet was already filed and now the clearance for arrest also given? If the loss is not made good from the same hands that caused it, the whole exercise will end up in a grand fiasco and all the institutions that pursued it will be rendered a laughing stock of themselves. Time that polity woke up and learnt to live by rule of law(Equality before law).

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