Particularly affected are infrastructure, electric vehicles and the National Education Policy
The Ukraine war is upending India’s dream budget and now gets further bruised with a rise in crude prices and retail inflation. The nation has to tighten its belt, go slow on reckless infrastructure spending, and be austere as indicators go for a toss amid efforts of the government to stabilize the economy. Oil and gas are set to bleed the country even as the government looks for alternative sources but the discounted products from sanctioned Russia look irresistible. The war is hardening the international market, soaring energy prices, making exports difficult as the rupee plunges against the dollar. Imports are growing at $616.91 billion, a 55 per cent increase, exports are at lower volumes at $335.88 billion. The trade deficit at $228.92 billion, a rise of 47 per cent. Borrowings are high and a likely cut on infra spending of budgeted `10 lakh crore looms large. The atmosphere throws Indian business and consumers at the mercy of global winds. It is also likely to fetch lower prices for the LIC privatisation move. As per the World Inequality Report, the country stands out as poor and very unequal with the top one per cent of the people holding more than one-fifth of total national income in 2021, and the bottom half, just 13 per cent. Average Indian’s income is `204,200 per annum or about `17,016 a month and the bottom’s is still less at `53,610. As of now, the government must do away with the unnecessary subsidy of `2908 crore (increased from `800 crore) for electric cars (EV). Similarly, it needs to review infra projects that defy the norms of the Inter-governmental Panel on Climate Change (IPCC). It also can consider cuts for many other infra projects.Such austerities are needed in various areas and the country must reconsider its decision to rush for EVs. Maruti-Suzuki chairman RC Bhargava has appropriately suggested not going for it merely for the issue of emission or pollution. He says: “EVs are not clean cars. These are far more expensive and does not suit Indian needs. EVs depended on coal fired thermal plants will not reduce carbon emissions or greenhouse gases in the next 10-15 years.” In other words, it virtually goes against the basic concern of the IPCC.
“If we just adopt whatever strategies the US and Europe are following, I don’t think we will be doing justice to what we need to do in India,” Bhargava says. So, India needs to rethink on its investments on unsettled EV technology, building of charging stations and making the country dependent on imports of battery. The battery, unless made with elements found in India would remain extremely expensive and supply uncertain. India may continue with CNG for now.Inflation and, low manufacturing are hitting the country. But these are not being addressed. The infra increases incomes of large groups but does not accelerate growth. India to grow has to carefully cut on infra and spend more on merchandise production. Times are difficult and complex solutions have to be worked out. The average Indian youth is in a perennial rush to enter the job market at the earliest. However, the National Education Policy, in a bid to align it with that of the affluent United States, is making them stick around in schools and universities for two years more. Primary education is delayed by a year and graduation is now four years instead of three. As education gets prolonged, it becomes expensive and can lead to unpaid study loans or increased college dropouts. This anomaly in the policy needs to be corrected right away.
(The writer is a senior journalist. The views expressed are personal.)
