Friday, September 25, 2020
Home Opinions Six things Modi government can do to deliver after the demonetisation pain is over

Six things Modi government can do to deliver after the demonetisation pain is over

There have been numerous economic and pseudo-economic posts weighing the costs and the benefits of the massive demonetisation exercise. People are trying to calculate the number of days it will take to replenish the shortage of cash, the cost of printing new notes, the benefits from tax collected on unaccounted wealth, etc.

But there is one cost which cannot be measured in numbers: The political cost.

A recent survey, highlighted the mood of the people regarding demonetisation as follows:

Almost 94% of the respondents felt this was a good step. That is huge. Considering BJP got barely 33 odd % of the popular vote in 2014, if 94% people support his move then he has truly struck a cord across political lines, irrespective of what the various opposition parties and their leaders are saying.

- Advertisement -

But, this 94% support came with riders:

  • 27% felt it was poorly implemented.
  • 36% felt that this move was hurting the poor the most.
  • 66% felt that the move had negatively affected them at least a little, some saying it had hurt them a lot.
  • 73% felt that the Government could have planned this better.

The saving grace was that a huge 85% odd people felt that all this inconvenience was worth it. This is the key. The survey did not ask this question, but it was worth knowing: Why people think all this is worth it, and how do they think they will personally benefit.

And this is the point which will haunt the Modi Government once the initial euphoria is over. Right now, the common man is bearing with the pain, hoping and expecting that some good will come out of this, like a pregnant woman, bearing discomfort for 9 months, knowing that at the end of it all, the joy of holding her baby in her hands will make up for all the pain.

This “baby” is what the Modi Government must deliver. Not now, not after 6 months maybe, but by the end of 2017 odd, if people do not see this “baby”, then it will not take much time for the opposition to whip up passions against the Government.

So how can the Government deliver the baby? The unprecedented collection of taxes due to deposits of hitherto un-taxed money, will fill up the coffers of the Government. And the people will expect to get their fair share in return. The lie told a thousand times that Modi will give Rs 15 lacs to each Indian from black money stashed abroad has already become an urban truth, and this demonetisation can become another such thorn.

The Modi Government might as well think along the lines of using this windfall to speed up development, by funding infrastructure projects, or social welfare schemes, or juicing up ailing sectors like railways, but will this work? In my opinion, the people of this country will demand some tangible, clear, objectively ascertainable good, coming out of all this. And to demonstrate this, the Government may have to consider any or all of the below:

1. Lower Interest rates on loans

This is probably the lowest hanging fruit and something which will happen very soon, which has already started. As the banks are flush with funds, the laws of economics will force them to lower interest rates. But this is a double edged sword. Across the board interest rate cuts can be twisted by the opposition as huge benefits passed on to “suit-boot” corporates, so indirectly the common man subsidises loans of the rich? Secondly, lower rates on loans will also mean lower rates on Fixed Deposits, again hurting the common man. Both these aspects will have to be tackled.

2. Lower Personal Income Tax Rates

The Union budget has been advanced to 1st February, and this will be soon after the 30 December deadline of demonetisation is over. This would be the ideal time to slash the direct taxation rates drastically. Expectations would be high as it is, since the last 2 budgets did not have any major sops. Add to this the demonetisation impact. The time for small-scale tinkering is over. The Government will have to announce a major shift in personal taxation rates, maybe keeping a very low rate for a large initial threshold, so that the net doesn’t shrink, but the existing tax payers get a relief.

3. Lower GST rates

This is the hardest one to crack. The Central Government’s hands will be tied by the GST council which comprises of all the states. The BJP states still my cede some ground, but the others may play spoil sport.  A cut in the media rate of say 1-2% would have a huge impact.

4. Direct Benefit Transfers

A section of the media has already reported this as a possibility and Arvind Kejriwal also has demanded this. And the Government may very well use this method. All the funds can just directly be transferred either in one shot or via staggered payments. For this to be implemented without any hiccup and leakage, the JAM (Jan Dhan- Aadhaar-Mobile) trinity will have to be functional soon, and this has been hinted by I & B Minister Venkaiah Naidu. If this actually works, it would be a huge step, paving the way for further subsidies to be deposited directly into the accounts of the needy.

5. Lower taxes on petrol/diesel

Internationally crude oil prices have been falling but the fall of prices of petrol and diesel in India has not been proportionate. The reason being the Government increased taxes at every stage so as to pass on lesser benefits of falling prices. This of course helped the Government at the macro-level, improving the fiscal position. It would be the perfect time to finally reduce the taxes on fuel, by using this demonetisation windfall to offset the losses.

6. Super populist welfare schemes

Another option before the Government would be to roll out some strong welfare schemes. We have already seen the PM roll out some insurance schemes, but something like a universal healthcare scheme or a medi-claim scheme could be a game-changer. The BJP Government in Goa has already rolled out something similar where the insured can get reimbursement of medical treatment expenses of upto Rs 2.5 lacs even in private hospitals, at a small premium, with the Government bearing the lion’s share of the premium.

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

Gauravhttp://bwoyblunder.co.in/
co-founder, OpIndia.com

Related Articles

Trending now

Separated from her family, kidnapped, converted to Islam and sold for an Ox: Story of Daphia who finally found her family in India

An old woman in Pakistan who was separated from her family during the partition, was abducted and converted to Islam, has finally united with her family in India over a phone call.

India Today journalists whine about media coverage on Deepika summons by NCB only to tail her car giving live updates from Goa

The leftists claimed that the summon sent to Deepika Padukone was timed to distract the nation from the farmers protest

Parliament sees its most productive session: Here is a summary of all the 25 Bills passed by the Modi government in Lok Sabha

A total of 25 bills were passed during the just concluded monsoon session of the parliament some of which are very significant bills

Amidst rising coronavirus cases in Maharashtra, doctor alleges Shiv Sena leaders have advised self-medication to suspected COVID patients

An e-poster in the name of Shiv Sena leaders has gone viral on social media platforms, under which they are advising the coronavirus patients to take prescriptions suggested by the Shiv Sena leaders.

5 questions about the new Industrial Relations Code and the Occupational Safety, Health and Working Condition Code answered

In the current parliament session, three bills - Code on Occupational Safety, Health and Working Conditions, Industrial Relations Code and Social Security Code were passed to reform Labour laws.

“Reports say otherwise”: Justice Lalit rejects Sudha Bharadwaj’s bail plea sought on medical grounds

Justice Rastogi rebuked Bharadwaj's lawyer, Vrinda Grover, for calling the medical reports false before the Bombay High Court.

Recently Popular

KWAN representative told me that I need to attend Karan Johar Parties to make a comeback to movies: Suchitra Krishnamoorthi

One of the main things is that you need to be seen at Karan Johar's parties, KWAN representative had told Suchitra Krishnamoorthi

‘Are your breasts real? Can I touch?’ Actress Sherlyn Chopra accuses KWAN talent agency co-founder of sexual misconduct

Bollywood actress Sherlyn Chopra on Tuesday took to Twitter to call out sexual misconduct of KWAN talent agency co-founder Anirban Blah.

Nikhil Dwivedi, filmmaker and director of talent agency owned by Salman Khan, claims latter did not buy stakes in KWAN. Read details

Uniworld Big Talent (UBT) owned by Salman Khan, holds major stakes in Big Bang Media Venture, the holding company which owns KWAN.

Casting director of Rhea Chakraborty’s debut film ‘Jalebi’ among 10 Bollywood personalities to have died in the past few months. Read the details here

A post containing the list of recent deaths of Bollywood celebs and the alleged reasons behind their deaths is being widely shared.

Chief of Chief Minister’s Medical Assistance Cell in Maharashtra breaks down while describing the coronavirus situation in the state

In the video, the chief of medical assistant cell in Maharashtra says that he has lost all hopes and that court is the only ray of hope now

Goa Police arrests actress Poonam Pandey’s husband Sam Ahmed Bombay for assaulting and molesting her

Born and brought up in United Arab Emirates, Sam is an ad-filmmaker and a producer. He had done projects with celebrities like Akshay Kumar, Ranbir Kapoor and Deepika Padukone amongst others.

Radicalises Muslim youth, spreads hate: Govt plans to ban Islamist Zakir Naik’s Mobile App through which, banned Peace TV is being broadcast

Central govt is planning to ban radical Islamist preacher Zakir Naik channel Peace TV, his mobile app and YouTube channel for inciting religious hatred.

Separated from her family, kidnapped, converted to Islam and sold for an Ox: Story of Daphia who finally found her family in India

An old woman in Pakistan who was separated from her family during the partition, was abducted and converted to Islam, has finally united with her family in India over a phone call.

India Today reporters chase a car in Goa saying Deepika Padukone is inside it, hours later says the actress is still in hotel

India Today reporters were chasing a wrong car in Goa, believing that Deepika Padukone was travelling in it on the way to the airport.

Delhi Police rebuts fake news by NDTV that Kapil Mishra named as a whistle-blower in Delhi riots case

Delhi police have said that NDTV is trying to peddle its narrative in Delhi riots by airing fake news, saying the channel is creating fiction

‘The situation in electronic media is like Nazi Germany’: Families of Congress leaders file intervention petition in Sudarshan News case

Wives of Congress leaders Rajiv Tyagi and Pawan Khera seeks to 'assist' the Supreme Court in the Sudarshan News case

NCPCR asks AltNews co-founder Pratik Sinha to submit proof to substantiate his claims in Zubair-child harassment case

NCPCR has asked AltNews founder Pratik Sinha to provide proof of claims made in support of colleague Zubair Mohammad in child harassment case

Kashmir High Court lawyer Babar Qadri shot dead by terrorists in Srinagar days after Islamists accused him of working for agencies

Kashmir High Court advocate Babar Qadri was shot dead at point blank range by terrorists in Srinagar on Thursday evening

Joe Biden’s son received millions of dollars from wife of Russian politician, linked to human trafficking and prostitution ring: US Senate report

Senate Committee's report on Hunter Biden alludes his association with Ukrainian and Russian business entities may have affected the US' Ukraine policy during the time Joe Biden was Vice President.

India Today journalists whine about media coverage on Deepika summons by NCB only to tail her car giving live updates from Goa

The leftists claimed that the summon sent to Deepika Padukone was timed to distract the nation from the farmers protest

Chief of Chief Minister’s Medical Assistance Cell in Maharashtra breaks down while describing the coronavirus situation in the state

In the video, the chief of medical assistant cell in Maharashtra says that he has lost all hopes and that court is the only ray of hope now

Connect with us

244,181FansLike
455,295FollowersFollow
16,800SubscribersSubscribe