Emergic: Rajesh Jain's Blog

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India’s Budget

July 9th, 2004 · No Comments

I watched the budget on TV. I normally don’t bother. But I figured the 90 minutes spent listening would give me a good overview of India and the government, and save me the time reading papers trying to figure out the various things the Finance Minister said.

As I watched scheme after scheme being unfolded for the poor and rural India with the politically correct phrases (food-for-work, drinking water for all, education for all, healthcare for all, electricity for all), I could not help but think that all we are doing is throwing some more money at the problem. While in some cases that may be a good idea, in the India that we live in, I don’t think it will make much of a difference except in some more already-filled pockets.

What rural India and the poor need are “disruptive innovations” in the way things are done (and I don’t mean technology here). Instead, we are giving them more of the same. Instead of Re 1, now we give them Re 1.20. But they will still get only 20% of this. What is needed in India is a radical overhaul of the way we execute on the ground and creating rural infrastructure like Atanu’s RISC ideas. But that requires some thinking and vision. It would take economists like our PM and FM an hour to read Atanu and Vinod Khosla’s paper. That is the New Deal, the Marshall Plan for India. They need to look no further. Even before we try and solve problems, we need to get to the root causes of the problem. That is something I have seen few people want to do. And until we do that, we are going to keep throwing more and more money every year. Education cess, increase in excise duty for playing cards (I’d have loved to eavesdrop on the group when they discussed this one), and so on.

So, I am disappointed. But why did I ever have expectations – I should have known better. I guess there is always hope that this year there will be something different, something magical. Anyways, there is always Budget 2005 to look forward to. Then, there is Budget 2006, Budget 2007, Budget 2008…

Tags: Emerging Markets

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