Chief Guest: Jawant Singh

BITE Penalists

- Kirit Parikh, Professor, IGIDR & Member Prime Minister's Economic Advisory Council
- Indira Rajaraman, Professor, Institute of Economic Growth
- Subir Gokarn, Chief Economist, CRISIL
- Siddharth Roy, Chief Economist, HLL
- Bibek Debroy, Director, RGCIS
- Suresh Tendulkar, Professor, Delhi School of Economics

Moderator: Jairam Ramesh, Economist

Host: Prabhu Chawla, Group Editorial Director, India Today

Opening remarks by PRABHU CHAWLA:

Welcome to all of you to the first meeting of Board of India Today Economists (BITES). It is a unique gathering in the sense that for the first time we have a practitioner of economic policies (the finance minister), commentators on economic policies (the economists) and the writers on economic policies (business journalists) under one roof.

The India Today group, which has a combined readership and viewership of over a crore (10 million) has been thinking of setting up its think-tank on economic issues for some time now. The objective was simple-to bridge the gap between what is called "real economics" and what is perceived to be "popular economics". We want to create an informed debate on economic issues in the times when the economy is not only dominating the agenda of the government, but economic issues are also getting increasingly complex.

The detail objectives of the BITE and the issues for today's meeting will be highlighted in the brief Power Point presentation that we will just make to you. Let me just say that BITE will be an institution to help the India Today Group to deepen and broaden the coverage of economic and business .

Let me now turn to the presentation for today's meeting

Presentation on Bite

End of power point presentation.

PRABHU CHAWLA: I now hand over the discussion to Jairam Ramesh

JAIRAM RAMESH: It a pleasure to wait for a finance minister who came on time. The FM is here for one hour and we should optimize that time.
I will briefly introduce the six member panel to you, though I am sure you have read them.

KIRIT PARIKH: A very eminent macro economist. He has been brining out India Development Report which is perhaps the most analytical and comprehensive analysis of the Indian Economy. He is about to start a think-tank in Delhi.

INDIRA RAJARAMAN: She has worked in many areas, but of late she has focused more on fiscal policy. She has been working and writing extensively on Centre-State relations and also relations between state and local governments.

SUBIR GOKARN: Used to be with National Council of Applied Economic Research. He is now the Chief Economist with CRISIL. He brings the corporate perspective into this panel.

SIDDHARTH ROY: Chief Economist with Hindustan Lever, which more than any other company in India mirrors the performance of rural economy in India. If there is one company whose top line growth gives and idea of the shape of things to come, it is HLL.

SURESH TENDULKAR: A doyan of economists in India. Teacher of many generations. He has recently authored two books-one on the India and the International Economy which he co-authored with TN Srinivasan and a thorough analysis India's poverty and inequality in the 1990s.

BIBEK DEBROY: Director of Rajiv Gandhi Instutite of Contemporary Studies. He is one of very few economists who has worked on interface of law and economics and area that economists have not dabbled in.

We will not turn the floor over to you to express your views and questions that you may have. After which the penal will make brief presentations-a tall order for six economists-but I am sure they will fulfill it.

Finance Minister Jaswant Singh's Opening remarks

Thanks you very much Mr editor, thank you Mr Jairam Ramesh, thank you ladies and gentlemen.

I am both honoured and intimidated to be here among this very distinguished gathering of economists. I am the only non-economist here. I am here to learn, to understand what is wrong with the Indian economy. I have been given a short course at the beginning of the meeting. I look forward to hearing from all of you not only what is wrong with the economy, but how can it be righted.

I feel somewhat like former US president Harry Trumen who once said: "Give me a one-handed economist". For every situation there are generally more than one options-on one hand and the other hand. I would rather have a solution which is only one handed and I know for sure what is to be done.

As a lay practitioner and student of public life what is the biggest challenge for me? I think it is economic security. Without economic security a nation has no security. So I have to try and do my bit to achieve that.

I aspire and endeavour to create for India a modern efficient and world-class fiscal system. I am worried about the state finances. We are a federal country and states of the union are-quite rightly-very jealous of their prerogatives. I have made some small beginning in this regard and I hope we will continue to add to the achievements we have made so far. I have had meetings on this issue. State finance ministers have also met. I have requested the prime minister to meet with chief ministers of states on October 18. We will start with some basic agreement among all chief ministers cutting across political parties on what needs to be done about the state finances.

I have inherited some financial institutions that are not in good health. I have to find answers. I need a regulatory system that is efficient and effective and yet does not working like police force. The government is not a policeman. But the government is the ultimate risk taker. Even in a transformed economy the government has to be the ultimate risk taker. It will have to cover risks that nobody else will cover. The government has to provide a sense of security simultaneously to trade, industry, businesses, workers and to the citizens.

I have some ideas that I am implementing. I have been in the job effectively for two months only. I believe that a finance minister should speak very little in public. I have held several jobs in the government by now and about the finance minister's job I believe that he should speak only when it is absolutely necessary and only when he is absolutely ready to speak.

I have a programme of action that I will start making public from 15th of October. It's a full programme that I have worked out and it will continue till about the end of January 2003. It includes lots of issues that have been raised here.

We are going to open out a great deal of our discussions in the finance ministry. A new website of the ministry will be ready very soon. We will be putting lots of proposals relating to taxation and other issues on the Net.

Let me just say that there is no growth without reforms. This is not simply axiomatic. There is no controversy in this regard. And since there is not controversy I am not touching it. But if any of you wish to ask anything, you are most welcome.

JAIRAM: Thank you very much Minister. I will now request each of the six BITE penalist to make a 5 minute presentation on what the finance minister can do in the next 100 days to improve the economy. These will be practical and feasible ideas and not philosophical ones. Dr Parikh lets start with you:

KIRIT PARIKH: I think the most important task before FM is to restore confidence so that the investment and industrial growth happens. I do not agree with some of the points mentioned earlier for example jobless growth. If you look at ASI survey data of organised sector between 1990 and 1997, 1.8 million new jobs were added whereas during 1980s added only half a million, less than half a million jobs.

So then one should ask the question in the last five yrs one may ask we have had some slowdown of the industrial growth so again joblessness may be related to the slowdown of the industrial growth. I feel industrial growth is one of the key point that you shld focus on. Now the question is why is the industrial growth not growing. The main reason is not enough demand for investment goods in some sense. Let me tell why this is happening. First of all there is lot of uncertainty about what the state of indian economy going to be. What kind of tariff regime we are going to have. And this we need to remove. We should first put our fiscal house in order. Responsibility act passed as soon as possible, proceed with privatisation. Give a clear signal on tariffs and reduce dramatically or give a programme on how it will be brought down over at least the next three years. I think we need to restructure government expenditure from subsidies and current expenditure to investment into infrastructure such as rlkys, social sector. Cut subsidy in fertiliser and various other infructous subsidy. We need to make sure that primary deficit does not keep growing. We need to signal that we are not getting into domestic debt trap which has to be avoided in any case. I think if we take these action a certain sense of action can be restored. Quite important to increase govt investmnet expenditure and not just govt expenditure. Increasing just govt expenditure does not necessarily result in increase demand of investment goods which does not really translate into industrial goods.

One can say what can govt do in terms of getting money needed to provide investment demand. I think one is certainly fertiliser subsidiy and many other subisidy can be looked into. We of course know the non-merit subsidy of the government cost the govt plus Rs 100,000 crore a year. I think the powers ector reforms is extremely critical thing. The way mr prabhu was stopped on his track has given a very bad signal. And one needs to do something to see that power sector reforms are back on track and that we should really push it rapidly. We need to widen the text base and what one cannot understand is what prevents us from computerising that entire text existing making sure of that everyone gets a pin and it seems that its easier said than happen. One of my colleagues was complaining that she had been applying for months to get a pin she has not been given a pin. so I think we need to do that we can ask infosys or wipro to say computerise the whole system in a year. and you can computerise so that you are able to check all transactions and very ability to able to check and would prevent some of the people who are evading taxes. I think enable banks to deal with their NPS andthat is to be done with an ordinance that is being enacted and make it effective and I think remove some of the anomalies you have already made that you inherited about existing financial institutions, you will have to bite the bullet of bad financial institutions because of the historicial policy inconsistencies that we have, I think you will have to reform the industrial disputes act, we need to go with land control restrictions and reform them, we need to ensure that agricultural goods can move freely around the country that there is a domestic feature within the country and realise that today more than 25% of the GNP in the agriculture comes from animal sector. There is a new restructuing of agriculture going on and we must facilitate that. So I would really second that domestic trade restrictions should go in many case have a common vat so that India becomes a free common market and I would say that may be pds has not become very effective but it is a holy cow. I don't know what you can do about it but at least introduce a nationalised employment guarantee scheme which is much more effective in reaching the poor and once having done that provided a job security to the poor then you say all other policies we are going to run on the ground of efficiency. Finally, for many of these things you will need legal reforms so that disputes get settled within months and not decades.

INDIRA RAJARAMAN: I think I should begin with the very first point the finance minister made in terms of what he would like from us. He said that he would like to have a world class fiscal system and since I have been working on fiscal policies I would like to address that issue alone. Kirit said in his agenda that he would like to have the fiscal responsibility bill passed. When I appeared in front of the parliamentary standing committee I did support the fiscal responsibility bill because I would rather have a bill than not have a bill. But there are problems in the way the bill is focused. In terms fo the targets that are mentioned in fiscal responsibility bill the fiscal and revenue deficits are to be brought down over a period of time. The reason I feel that is seriously misfocused is that the deficit that is the revenue deficit or the fiscal deficit is a difference between expenditure and revenue. And in order to be fiscally responsible it is not enough to focus on this difference, what you have to focus on is the tax GDP ratio which forms the base on which you bill your deficit or obtain your permissible expenditure. Now the problem with the Indian fiscal sys and the reason why the world capital markets drew India as a fiscally irresponsible state is because the tax GDP ratio has steadily declined in the 90s. last year 2001-02 tax-GDP ratio at the centre was 8.5% of the GDP since that's the lowest that it has been in the last 12 years. And we have allowed this slide to take place right before our eyes at a time when a reform programme was on. Now in part this is because we brought down the rate structure on income tax and in part it is because we brought down trade taxes so we are getting less revenue from customs. In other countries that have reform programmes these developments have been factored in and there has been well thought of, well strategised expansion of the tax base such that revenues were protected. This is something that we have been unable to do. But the question is what should we do about this? What I think we should do is instead of having a deficit reduction programme, I think we should have a revenue GDP increase programme. This has to be spelled out in terms of the rise in revenue GDP or tax GDP ratio over a period of time. Now how is this to be done? I have very very specific suggestions to offer in terms of how this is to be done and it can be done right with the ministry of finance itself. I was a member of working groups that were charged with the task of projecting direct and indirect taxes for the 10th five year plan. When I had discussiion within the ministry last year I was very forcibly struck by the extraordinarly good ideas that came up from within the ministry, from within the revenue depts for direct and indirect taxes and by the extend to these officials feel very frusted by the fact that there views on the kind of supporting legislation that they need don't filter up sufficiently. They don't have direct access to the finance minister. These views are filtered out at various stages. Finance Minister here is not the real thing. I think that as FM and new FM it would be a good idea for you to be more in touch with the direct & indirect taxation depts of yr ministry, meeting not just with the high level officials but the foot soldiers, the people who are incharge of collecting the revenue, asking them what kind of limitations they face in terms of collecting revenues they have excellent suggestions to offer in terms of the kind of legislation that would empower them and enable them to collect the taxes which they know are there to be collected but which they are unable to do because they don't have the kind of legislation they need to have to strengthen their hands. So a certain amount of delving into your own backyard into yr own officials who in my opion have very-very high quality, into lower ranks we have some excellent people in revenue dept. but they feel very frustated. I don't agree with Kirit completely on his excessive focus on computerisation, ofcourse the absence of computerisation is a ….. problem and the fact that we do not have enough information on what is being collected and where it is being collected from. I don't think that is the sole problem. There is a problem of the lack of legislation and empoweing support for revenue collection officials such that they can do the job that they are supposed to do. They feel on the one hand frustrated on the other hand there are revenue targets imposed from above which they are unable to meet because they are simply unable to collect the taxes that they know are there waiting to be taxed.

ON AGRICULTURAL TAXATION:I don't think it is a good idea to include agrl income in the central I-tax because the centre would be as ineffective as the state govts have been in taxing agri. I think powers to tax agriculture should be kicked down to the 3rd tier to the panchyat level of govt. I fully agree with the finance minister that there is a major fiscal problem with the level of state govts but we have to remember that in the Indian fiscal system 2/3rds of the revenue are collected by the centre and the centre has to set an eg in terms of what it is able and willing to do, I think the answers come from right within the finance ministry.

There has been a problem with the past finance commissions in terms fo lack of transperancy in the manner in which state awards were drawn out. I think we need to have much more transperancy. There is no reason why the data submitted by the states to the finance commission should be so highly secretive. It should be exposed and examined publicly. That is the single biggest suggestion that I have.

SUBIR GOKARN: I would like to again focus on one single issue that unifies all of the 3 dimensions of the crises that was laid out in the presentation. I see the crises is having 3 dimensions - there is a fiscal dimension, there is a financial dimension to it in the sense of vulnarablity and fragility of the financial sys. And there is an emplyment dimenion to it which is not generating enough jobs in the economy to accommodate the growing labour force. Now all of this to me is rooted in one single phenonmenon that is the state of Indian industry, more specifically the self Indian manufacturing. In five of the last 6 years the rate of growth of manufacturing has been slower than the rate of the growth of overall GDP. In other words we are in a situation where the share of manufacturing the economy is shrinking, it is in 2000 according to the world devl. Indicators data about 14.5% which compares very unfavourably to achievements of around 34-35% of most of the stationed economies from lowest to the highest - Indonesia say 26%, china about 34%. Now why is manufacturing so critical to our current state of eco. being. Tax burden is disproportionate to the manufacturing sector - one quarter of the GDP supports far greater per-centage of the total tax revenue. So as manufacturing declines so does the policy of the tax system. Financial system is disproportionately exposed to manufacturing to industry in general, IFCI for instance the worst of the 3. Big institutions has 80% of its portfolio exposed to manufacturing, the others are around 60-65%. ICICI has enabled to hetch itself by going into various other forms of growth, various other sectors which are growing rapidly, but IDBI and IFCI caught in this manufacturing exposure. The same thing with UTI and in some sense you can say the stock market reflects the 75% of the listed scrips are from manufacturing the stock market again reflects generally the ….. state of manufacturing. As far as the employment is concerned ultimately it is the large mass of potential …… worker that we are trying to accommodate and that's really the role of manufacturing. Manufacturing has been the sector that has been accomodating this group of people. Services accommodate very highly trained, highly skilled people at one level and very very low skilled with not much prospect of mobility at the other so it is manufacturing that provides middle ground of employment which has been so deserved. Taking all these 3 factors into consideration I think the single solution that what can we do to give manufacturing a huge boost. I think the 3 or 4 things we have been talking about repeatedly over the last few years but for various reasons don't get on to me the critical short term devices for getting manufacturing back to what I would consider its central role in the economy labour reforms are absolutely critical I think by not giving employers the - you are plotting a lot of risk for investment in manufacturing through delicensing, through trade reforms make business much more riskier, you have to give corresponding flexibility at the ….. that means among other things labour reform, alongwith issues of exit and restructuring which the securtinisation ordinance in principle addresses quit effectively because that has to be implemented more carefully. The 2nd more constraint on manufacturing I believe is reservation for small scale industry as there has been a huge debate on whether this thing has a meaning any more, its being declared redundent by the tariff reform by the movement away from restrictions in tariffs. But still the fact is that it is contrain on the ….. to go once it chooses to get into particular line of business I think that's completely unnecessary and redundant constrain, I think due reservation is absolutely critical. The 3rd device is the exchange. We are in a situation we are comparing countries which have retarded in some sense manufacturing sectors with those that don't. A very critical difference between these groups of countries, Latin America and South Asia on one hand and East Asia on the other is where the exchange rate is relative to where it should be. The tendency to have a over value exchange rate is highly damaging manufacturing and given that we have this huge buffer now the time is very clearly on us to expand domestic demand for foreign currency which is the way to get the exchange rate by some sort of more realistic track. There were some devices in the budget which expanded domestic demand. I think that has been taken forward very significantly. Prudential norms are all fine but basically Indians have to dole out more dollars if exchange rate to look more realistic. These are basically the short term immediate devices, I think on the longer term issues relating to power and transport are absolutely critical ….. as refered to power sector reforms. But ultimately I think all of the problems that we faced with have to be paradoxically a very simple and ulmost single point solution. We get manuf. Back on track, we get manufacturing growing at 3 or 4% points above GDP which is what we had for a very brief shining period in 1990s and which dealt with a majority of our problems.

JAIRAM RAMESH: The single most important action that FM can take to revive is to remove the fiscal anomalies in the textile industry. We are the only country in this world which has followed textile first strategy. We had a planned killing of the textile industry. We killed it through SSI reservation, fiscal regime - which we have not been to correct, which is entirely in your domain. If you can promise a world class fiscal regime for the textile industry, there wold be more jobs, more exports and a big boost to growth. There is a critical link between the health of the industry and textile industry. licensing, reservation and fiscal policy has killed it.

SIDDHARTHA ROY: The progress of employment growth has been tardy. Employment elasticity has come down dramatically, particularly in agriculture and in community and social services. Nearly zero in agriculture. When elasticity comes down, not everything is bad. It may show that productivity is going up.

But one thing is clear unless output grows employment will not grow. Also at the end of the day the output has to be consumed. So there has to be demand for the output to grow.
If you look at fiscal struxcture in the country - incidence of tax after the manufacturing price is you take out the trader's margin - the incidence of tax including sales tax and central tax is around 33-51%. That's the kind of incidence that you have. Assuming you have some kind of price elasticity for the consumer and your bring it down to certain respectable l;evel the demand is likely to expand. In 1993-94, the tolietries taxed at 70%. In 1997-987, came down to 30%. Total revenue collected in 1993-94 was Rs 130 crore. In 1997-98, Rs 396 crore - almost three times. A part of natural growth and also a part of lot more people got into the sector. What is the tax incidence in various sectors - we have to look at.

Cascading effect of taxation is very severe. A simple calculation: Raw material 10% CST, another 10% crossing charges, intermediate taxed at 10% and another 10% as crossing charges which is the semifinished product. Now on the final product tax of 10%. So total will come to around 177%. Take some other country - which has got similar processing charges but not the same kind of processing charges where the total tax will work out to 143%. So industry becpome quite uncompetitive unless we remove these anomalies from the tax structure.

Small base on which entire indirect tax is imposed. If we can enlarge this base - lot of exemption, go to services. Of course all shld be done within the framework of VAT.

What has happened to textiles industry is going to happen to plantation industry. Direct and indirect employment is 1.5-2 million. And a large number of them are women coming from the underprivileged class. Social cause - hospitals and schools built to the plantation. Internationally prices of plantations produce is coming down. So as a result Indian planation products are becoming uncompetitive. If you look at sri Lanka, Vietnam, China - all these charges are borne by the government. If nothing is done - they will soon go the way of textile industry. From the employment and citizen security point of view - it is imp.

Special economic zones: Many units are located close to the source of raw material - many of them may be EOU like diamonds but there need not necessarily be SEZ in the area. So it may be better that we allow certrain unit which is exporting - say for the last three years etc - provide them facilities which SEZ units are allowed and call them virtual SEZs or something like that.

Unless you spur demand there is no way you can have higher growth - from the consumption side.

JAIRAM RAMESH: Example is in IT and cellular industry - the market boomed when tax rationalised. This has not been tried aggressively in the market but it can help grow a number of industry.

SURESH TENDULKAR: It is wrong to say that jobless growth. Yes that's the case in the organised sector but overall if you look at jobs in the 1990s have grown. Disinvestment: very conflicting signals are coming out of the govt. I think the PM says there shld be discussion. That's ok but discussion shld have happened in the cabinet. But many of those issues shld have been resolved within the cabinet. Its giving conflicting signals and eroding the credibility of the disinvestment process. The modality has to be determined in each individual case. But the general policy has been laid and we shld stick to it. But now there are several channels that are being opened - strategic or etc. It was a good idea to take the PSU out of the administrative ministry because- in disinvestment options are going to diminsh. It is important for the govt to get out of the commercial enterprises.

Use of disinvestment funds - the recomemdnations have not been implemented which would have helped sell disinvestment. Putting the proceeds to bridge the fiscal deficit is something that's eroding the usefulness of disinevstment

Time-bound reduction in tariff. India has one of the highest tariffs in the world. The industry is protected. Unfortunately there has not been pre-announced reduction in tariffs. It has been in bits and pieces. As a result of lifting of QRs, tariffs on consumer goods has gone up more than 50%. Overall tariff rate has gone up from 25% to 35%. Tariff rates need to be brought down in pre-announced fashion.

Labour reforms: Yashwant had suggested a good compromise to increase the approval to 1000 workers and increase the retrenchment allowance from 15 days to 45 days. But the problem is many enterprise is cash strapped. Have an unemployment fund., which is a must. In a boom period it would have been easire but still.

It is paradoxical that you have indian labour conference in which three parties come together but parties have not opened the communication lines to the trade unions opened to them. This shld hjave been the first step to build a consensus. There is a shaky protection of existing workforce in the orgzed sector. Essentially allowing orderly retrenchment and exit - that is choice that needs to be posed and discussed. Distinction needs to be made between job security and employment security. Growth has resulted in jobs no doubt about it. During boom there was significant growth in employment, including the informal sector.

BIBEK DEBROY: Much of what we are witnessing is negative sentiments. Some of those sentiments are related to privatisation, suresh prabhu, there were reports that fertliser reform will not happened.

What is wrong in depiction of what is wrong. Its extremely urban. If we have to achieve 8% growth then we need agriculture reforms. A big mess - profitability squeezed, growth and output decelerating. On agriculture long agenda of reforms - agriculture being state subjesct the problem is which govt will implement it. We have inserted a principle in the devolution of funds in power sector and some of these urban funds linked to reform

Downsizing govt. True that central govt 3.2 million does not amount anything but its impot in sending out signals. Imp in imparting signals to state which are in grave financial state.

Governance: We have all thse central sector schemes which are totally useless. Make them completely decentralised and lean and reinvented. Planning commission has done any number of schemes saying they are extremely uselss.

Right to information Act without the caveat

Tax issues: Import duty: clear timeframe for reduction of duty. Protection - imp to exchange rate depreciates. Difficult to engineer except one can try and do is ease slowly some of the controls on capital account. Direct taxes: I would like exemptions to go - but time not right. Other things - procedures can be simplified. On indirect taxes: I am not sure VAT is going to happen in complete sense by the next budget. At least CSt shld go - there shld be single 16% next year. No deviation from that.

JAIRAM: Mr minister you may want to respond to some of these issues:

JASWANT SINGH

The Finance Minister's Closing Remarks

Thank you very much. I am richer after the discussions. … I agree with what you say about the sentiments. I must respond to one or two things. On subsidies, I was interested to learn from IMF economist Nocholas Stern that daily subsidies on agriculture in Western Europe, US and Canada are around $100 billion. A single cow merits a subsidy of $2.5 per day in the US. And a cow earns a subsidy of $7 a day in Japan. Now in the face of all this when as a non-economist I am told subsidy is bad and should be abandoned, I am really left very confused. I admit to Mr Debroy that I did not mention agriculture but its not that agriculture is was out of my consciousness. For somebody whose home is in a village and who is born in a village, that is impossible. But I am really not in a position to reduce agriculture subsidy. Food security is an essential security for us. There is no country which will feed 1 billion people.

(Interruption by economists): The point was that 60 per cent of the fertiliser subsidy goes to some gold-plated industrial units, not to the farmers.

THE MINSITER CONTINUES: Perfectly legitimate. That fertiliser subsidy is not going to the farmer like kerosene subsidy. It is not benefiting the poor but those who are adulterating it.

On computerization of tax adminstration, the day I took over I had set a target--and I have already achieved partly-of computerization of 62 centres. I have set them a target of total computerisation and allottment of all PAN.

Value added tax is one of the issues we are discussing on 18th October. There is an agreement and some states have already enacted relevant laws. Will I get one uniform value added tax across the country on October 18? May be not. But I would have taken significant steps forward.

There are number of other issues. On disinvestment I would like to mention it is unfortunate that the debate trickled out from the Cabinet conclaves to an issues that is discussed in newspapers. It would have been ideal if the issue wasn't so discussed. It is not as if disinvestment has been abandoned, it's far from abandoned. But disinvestment is not synonymous with reform. Economic reform programme is a much larger programme - and to make disinvestment synonymous with only strategic sale would also be oversimplification.
Of course every disinvestment issue must be addressed on the basis of the requirement of the particular PSU in question. And that is what is being done. But it would be an error to judge individuals or a government against just one criteria, which is do you pass the bill on this particular issue or do you not pass the bill.

There has been an absence of capital investment in agriculture for a length of time. We have lived on what we had. The dilemma is that it is partly a state subject. Building infrastructure will be crucial. One of the purposes of connecting all villages with population of 500 is to build infrastructure.

What has minimum support price done? It has destroyed the mandi systems of the country. I am a failed farmer and I speak from experience. Of course, the villager trader (adhatiya) looted us. I was one of the victims. I was indebted to adhatiyas. But nevertheless there was a village marketing system that minimum support price destroyed. It is very difficult to restore that. Government has become the biggest adhatiya. So lets not blame FCI alone. Over the years all of us have brought about the world biggest and most inefficient adhatiya in the world, that is the Food Corporation of India.

You will have all these issues in the next one month on the Net. Largely, the economic situation of the country. How I am looking at the future fiscal position. What kind of tax reforms we are thinking of. I am trying to demystify all this business of budget making.
The economists are most welcome to tear me to shreds, give advice and to say occasionally that what I am doing is fine.