Before advancing the “empty coffers” line, Prime Minister Narendra Modi (“Left with empty coffers, says Modi, June 15) should clarify the state of health of the Gujarat State treasury so that people will know how effective the famed “Gujarat model” is.
Blaming the UPA for the government’s woes today is a classic ruse to gain time, especially when one is clueless. Mr. Modi cannot continue to be in campaign mode by blaming the previous government for the difficulties he is facing as he has only himself to blame for having raised expectations to dizzy heights in the run-up to the election. Yes, the UPA could have done much better on many fronts, but the economy is in reasonable shape, having grown well under its 10 years of rule.
The rescue plan before Mr. Modi is not very different from what the UPA would have done. He needs to give his full attention to tackling inflation and prices and learn to be modest. In India, the truth is that the government needs to intervene continuously as far as essential goods and prices are concerned, which takes away a large chunk of the resources the country can generate.
Who is responsible for the empty coffers? The reason is simple. Non-productivity is the sole reason for today’s state of affairs. Many State governments have made people lethargic by announcing various freebies, unwanted subsidies and concessions which have only drained the tax-payers’ money. States then demand funds from the Centre with some even wanting special status for their States. If Mr. Modi wants to improve the nation’s fiscal health, he should first discipline State governments without which his plans may run into a wall.
Bhanamma Aravinda Bai,
To suggest austerity as a solution to economic crisis does not require extraordinary leadership skills or intellectual prowess. If experience is an example, austerity worsens depression and leads to recession. The statements by our leaders and their bureaucratic advisers show that they are still in the dark about tackling the crisis facing our economy and are only looking at textbook solutions.
Mr. Modi’s warning of “tough decisions” ahead and his claim of having inherited empty coffers are surprising. While the economic situation during UPA-II was certainly not rosy, it was not in the abyss either. Now, the warning will only alarm the common man who voted overwhelmingly in preference for the BJP. The fact today is that there is no free run; there have to be taxes. The government should look to mobilising resources by taxing the vast corporate sector that has been enjoying tax cuts running to lakhs of crores of rupees.
J. Anantha Padmanabhan,