A boon may become a bane for state economy

Satyajit Kumar Sharmah Thakur

(sksharmahthakur@gmail.com)

That the poor class of people in the economy must get the greatest attention of the government should be everybody's heartfelt desire. Ours is a country with an increase in the number of poor people also with the rapid conversion of middle-class people into that group of poor people, the challenge before the government is a very mammoth and complicated one. True, distribution of freebies in both cash and kinds and waiver of the loan in the very precarious condition of the loan recipients may be adjudged as necessary sometimes, but the continuity of the process with rather increase in the number of beneficiaries is likely to do very great harm to the economy of our country in the days to come. Even though at present it seems to be getting much acclaim from the majority of the people in Assam, what I sincerely think is, unless the government comes out with policies of replacement of those measures with identification of ways and means for contributing to the state's economy on the one hand and to ensure financial well off of those people, on the other hand, such measures of the government will not only plunge more and more several people from the middle class to the poor class but will hardly benefit those beneficiaries to accept the ever-increasing challenges in all the spheres, may that be education, health, and employment etc. in the societies because we have already noticed how consequent to availability of several schemes of freebies, numbers of the beneficiaries have abandoned their cultivation and their other respective professions that they were engaged in. Such measures of the government may be an ad-hoc soothing balm but cannot be a permanent solution. That failure to come out with permanent solutions and resultant extension of the bases of the beneficiaries under different schemes will bring very great danger to the economy is near the future, I am not having any iota of doubt. However, the needs for higher education, healthcare and financial relief during old age when the capacity to earn goes down etc., are always on the rise resultantly requiring in very serious consideration of the government for those who deserve such consideration.

The government deserves a great accolade for increasing the number of educational institutions. Healthcare institutions including medical colleges and hospitals are also showing a great increase in their numbers. The claim of the government that its effort for creating vistas for employment is very satisfactory, to me, requires a meticulous examination for coming out with an all-encompassing comment. Because factors like an increase in the number of jobs vis-à-vis an increase in the number of unemployed youths, the likelihood of viability of those wherein employment opportunities have been created, and compensation packages, if at all can compensate the financial requirements for comfortable subsistence etc., are some of the salient points which must be thoroughly analysed before arriving at the level of success of the government strategies in that regard, more specifically when both the industrial and agricultural sectors have failed to vouch safely for meaningful absorption of unemployed youths. There are several schemes of the governments for different beneficiaries from free distribution in kinds to the free distribution of money. They are enjoying two major meals every day comfortably at the mercy of the government viz. at the centre as well as at the state. But such schemes are mainly for serving political ends, not economic ends.

For a long, I have been writing relentlessly on the imperativeness of permanent solutions to the problems faced by the economy of the state and how failure to ensure an increase in vistas of earning incomes, is likely to be dear to the state. If the governments successfully create avenues for absorbing unemployed youths, take every strict measure possible to ensure fruitful utilization of government aid for revamping the deserving industrial concerns, and ensure availability of government aid only to those who are still carrying on their commitment to contributing to the economy, that will be a welcome step towards the well-being of the economy. It will be very dangerous for the country if the governments turn a blind eye to how the freebies may detrimentally affect the economy because, in the event of that, the pain of its blow to the economy will be very hard to bear.

Numbers of PSUs are already reeling under heavy losses. Of course, it is not an overnight effect. The easiest solution that the Central government is found to have been exercising is handing over such PSUs one after another to private parties whose main object is earning as much profit as possible unlike the PSUs wherein the welfare of the people including corporate social responsibilities play a very significant role.

It is, of course, not that all the government schemes of freebies in cash and kinds are detrimental to the economy. The schemes of the government to improve the financial conditions of the poor people through the prevalence of merit-cum-means based scholarships, relaxation of fees to the poor students who are eligible to pursue further education by merit, subsidized loans for purchasing vehicles for business purposes, and free education up to the certain level of formal education etc., are always welcome for the same being for the well-being of the eligible sections of the people. But, let us not forget that consequent on availing themselves of the benefits offered by the governments and thus becoming eligible to earn their livelihood, they must not only earn their bread and butter but must also devote themselves to creating further employment opportunities as expected by the government and the society. Unless the government strategies do justice to the economy of the country with the respective contributions of the states and the union territories, the rapid increase of pain to the economy will be quite inevitable. To increase employment opportunities in the private sector enterprises, we must exercise our duty to urge the governments as well as to prevail on the business houses to do their best with consideration of the creation of employment opportunities as an imperative corporate social responsibility.

The most detrimental effect of the creation of more and more beneficiaries and government schemes is the rise in prices of goods and services and an increase in the debt burden on the people. The beneficiary schemes of the government must have a specific objective to achieve and the government must have thorough feedback on how the benefits of such schemes have been utilized by the beneficiaries. Till the date of submission of the state budget, 2022-2023, our state was under a burden of debt with a loan to the tune of Rs 1,08,347.27 crore and as revealed by the Chief Minister, the government is bent on taking another loan of Rs 19,353.59 crore. This is even though every citizen of the state is with a debt burden of Rs 34,721, and out of its comparison with the debt burden of Rs 9,380 in the financial year 2014-2015, we shall surely understand the magnitude of the problem now. Where an unbridled trend of that growth of debt burden will lead us to, is, to the people of Assam an absolutely simple deduction! I would like to assert once again that if the economy enjoys benefit out of the fulfilment of the purposes for which such loans are taken, we shall have reason to get satisfaction. But has it happened to our satisfaction? Certainly not. Such schemes of the government should have been able to lift the economic conditions of the beneficiaries, but how much we have achieved is quite clear before us. On the one hand, we are witnessing growing dependence on government benefits including the freebies and on the other an increase in the prices of goods and services with a rapidly growing unemployment problem. The salaries of most of those who are employed, are also not sufficient for smooth subsistence. Further widening of the gap between the increase in the cost of living and the increase in earnings of a very huge percentage of the employees, is making the situation more and more critical. Closure of business concerns and further tapering of the capability of several business concerns to continue uninterrupted salaries to the employees are rubbing salt into the wounds.

As revealed by the government, in the state out of 3.30 crore of people, 2.5 crore people are beneficiaries of the free distribution of rice. A whopping 75% of people are as such dependent on the government's free distribution of rice- do we require a more alarming picture of how serious the problem is? When the creation of jobs and more favourable turf for the growth of businesses should have been the prime focus of the government, what the government is trying to achieve by increasing the number of beneficiary schemes by passing on the buck to the shoulders of the people by increasing the already existing debt burden on the people of the state, is likely to fulfil political ends only. I have not noticed any convincing action from the government for creating new vistas for further industrialization, revamping the sick units, and increasing the production and productivity of the existing ones. The service sector is no better than the goods-producing sector. The state of Assam, with places and monuments of historical importance and natural floras and faunas, should have been able to attract a sizeable number of tourists every year, but what is happening is well known to all of us.

To me, the government's policy of creating beneficiaries without making them financially solvent as I have already dwelt on will cripple the next generation from accepting the emerging challenges. With no pragmatic action for an economic turnaround, that out of the remaining 25% i.e. who are not dependent on that free distribution of rice by the government, with the growing burden of price rise of goods and services, increase in taxes and school admission and tuition fees etc., some more will slip into poor class, is quite inevitable. Our failure to forecast the extent of economic implication on the people in such an eventuality, and the government's failure to take actions towards resolving that, as I apprehend, will put the state's economy including the economic conditions of the overwhelming majority of the people in the state into a great disaster.

Even though government schemes for beneficiaries are there in all the states and the union territories in the country, for Assam the extent of the economic disaster the schemes may result in, is feared to be greater compared to most of the other states and the union territories because of its industrial and agricultural backwardness and hence the growingly more dependence of the people of Assam on various such schemes of freebies than most of those states and union territories, is an undeniable fact. Even in respect of agricultural produces, except for a few in respect of which Assam is self-sufficient, for others, Assam is dependent on the other states and union territories. Except for the setups based on oil and natural gas, Assam does not have any heavy industrial setup. Power generation of the state is also pathetically low compared to rising demands. Out of the industries, the tea industry, which employs a maximum number of people, the majority of the tea estates are still in the red. As I have already dwelt on, even though the tourism sector is blessed with abundant resources, it is no denying the fact that the failure on the part of the government is making them incapable of attracting a sizeable number of tourists. All those sectors that I have dwelt on, will hit the state's economy very hard. While actions of the government to accept the challenges to turn around those sectors will put the economy on the path of progress, staying away from facing the realities, will be undoubtedly more and more devastating for the state's economy, which is no exaggeration.

For the reason that almost all the central sector schemes and the centrally sponsored schemes of freebies are having all India applicability, and Assam has already exceeded its fiscal deficit significantly compared to the budgeted target during the FY22 and given the urgency, I am much more worried about the impact of the extension of the state government's schemes of freebies and coming out with new schemes of freebies, on the state's economy.

The trend of the growing burden of debt on the people is so worrisome that unless pragmatism prevails over ad-hoc measures, the state is heading towards a great economic turmoil, which is very clear writing on the wall. In the context of growing dependence on freebies with an unabated increase in the debt burden and rapidly growing financial requirements on different fronts with great hardship in meeting them by the majority of the people, the economy of the entire country is heading towards a disaster, to me, is convincing.