The first step to curtail imports of luxury goods is most important. Moreover, foreign tours by officials and non-officials need to be checked or controlled. The use of Indian products should be encouraged even with the subsidy to check imports. Health-related tours and procurement of medical requirements should, however, be exempted from control.
It is not a rocket science to understand the problem we are facing regarding sliding Rupee against Dollar. Black money is converted into US Dollar. Massive buying is in the process. This ought to have been anticipated earlier and corrective measures initiated and that must have taken place at the right time. With 2019 election on the cards, NDA is giving an opportunity to the opposition to forge ahead.
So why did the Modi Government allowed Rupee to fall to its weakest and lowest level in the last 70 years before looking for cover? Are these steps are mere eyewash to lull deeply disturbed Indians into a false sense of hope and relief? Clearly these steps are too weak to make any impact on the Rupee downslide. Sane and sober steps to float the national Rupee, toughen the bank regulation and create a bigger masala bond market. These are bound to help India if the global turbulence by year‘s end should get worse than that of a decade ago.
These are the short-term measures that government may able to reduce current account deficit for time-being. However, what the government is going to do to adjust the foreign trade balance of country in the long-term is a thousand dollar question. It is even more important to curb all the non-essential consumption such as fuel and salaries by the Government Employees, MPs, MLAs and to avoid unwanted foreign tours. Nothing said about restricting the import of non-essential items and increasing exports. What can a layperson make various reports coming out in the press? 99.9 per cent people would remain in the dark.
All proposals will only have a cosmetic effect. On a long-term basis, India needs to migrate to unconventional energy use, revolutionary changes in public transport facilities, both over-head and under-ground, modernise national highways, introduce dedicated corridors for freight movement, upgrade rail-speed and safety. Already, 40 per cent of roads are occupied as parking lots, how do we cope with an additional 2 million vehicles a year and more? Mind-boggling proposition for our leaders, who do not even understand what ‘debates’ are all about.
Remittances by relations from abroad are subject to VAT/ GST besides the normal currency conversion charges. Why these charges can’t be waived to benefit the recipients in India. Finance Minister said that the government would restrict the import of non-essential items why he did not disclose the list of non-essential items.
The first step is to encourage foreign remittances coming to India and more concessions are offered to bring in more funds from outside. It is high time that we go into the details of curbing prices through effective methods and see that we recover before the year-end instead of precipitating the matter. Oil prices are increasing in the world market by the day. If the prices of petroleum products in India are subsidised, oil companies will incur losses. As for decreasing customs and excise duties, this will affect the Government’s revenue, which it proposes to use for welfare activities. The Centre has raised the prices of petrol and diesel by less than half of the oil companies’ demand. But the State Governments have shown no such consideration. Over the last two years, when petrol prices have risen by about Rs17 a litre, I wonder how many State Governments reduced sales taxes even once. They silently gobble up the increased revenue and use it for funding their populist schemes many of which contain untargeted subsidies. Our economy is vulnerable to fluctuation in the international crude prices, and we are paying the price for excessive dependence on fossil fuels.
The Government must evolve a comprehensive national energy security policy. It must stimulate massive research and development in alternative energy such as solar, wind and biofuel, even if it means putting the mission to the moon on the back burner. Citizens too have a role to play. They should consume energy judiciously, and use public transport whenever possible. Ballooning current account deficit in the face of ever-increasing hike in fuel prices is a cause of serious concern. Housewives are deeply concerned about the increase in prices of commodities. Travels can be postponed to a future date looking at the various factors concerning the increase in ticket price. It is time to wait and watch rather than much perturbed all the time about the ever-increasing petroleum product prices. The first thing is to save rupee from further fall against US Dollar. It is indeed a make or a break situation!
(The views expressed by the author in the article are his/her own.)