The $5trillion economy aimed at
and to be achieved by the year 2025 is a huge task and the wherewithal to find the
financial resources from within and outside the country to take the economy
from its unusually slow pace and put it
on fast track poses a major challenge by any standards based on the unimpressive
fiscal resources of the Government, dwindling national gross savings and the
lendable resources of our entire financial system which is unfortunately
saddled with bad loans and lack of avenues to plug the loopholes of loot in
innovative ways. No right thinking person can deny that the country has no potential
in terms of talent and all sorts of resources in terms of Land, power, labour,
natural resources and capital both in monetary and non monetary form needed to
support the growth but unfortunately the readiness to exploit the resources
through reforms and meaningful and result oriented Governance standards has
been found to be elusive. Rhetoric pronouncements are very encouraging but they
have to be pursued vigorously and implemented in letter and spirit to bear the
fruits and bring the intended benefits for all to enjoy the fruits.
The Fiscal deficit which is kept
with great difficulty under control at around 3.3 % of GDP can definitely be
stretched a little more to justify productive investments with tight control on
extravaganza by any chance and enhance the physical infrastructure. The recent
announcement to develop the infrastructure by $ 102 trillion is a welcome step and
definitely very bold and commendable provided the plans get implemented fast
with the Cooperation of the State governments and active involvement and participation
by the private investors. This is the ideal time to fix the problems in raising
the resources through incentivised savings, monetising the resources like gold,
waste lands, and plugging of all possible loopholes now available to evade all
sorts of taxes including GST , Income Tax, stamp duties, through creative
accounting practices of all kinds practised in all types of transactions in and
around the country, widening and deepening the capital market particularly the
debt market through retail marketing of bonds including the masala bonds issued
abroad and strengthening the take out Financing which has not taken off for valid reasons. The informal economy continues
to grow strong in innovative ways with and without the support of the
authorities paving ways for tax evasion and without accounting for the
computation of GDP, employment and being amenable for any Governance.
Huge number of farm lands and
clubs, shops and establishments with and without licences, religious trusts,
temples, churches, mosques and all forms of charities and NGOs in and around
the country are engaged in different economic activities and services but to
what extent they contribute to the economy and account for their activities in
terms of production of goods and services, tax payments, generation of
employment etc, cannot be satisfactorily assessed is a fact leaving a huge hole in the
economy’s over all data compilation and leakage of income. Such a list is very
long and unending but huge money is involved cannot be disputed. This needs a
very serious attention and follow up action to raise resources of the
Government at this crucial juncture.
Banking system is the life blood
of commerce and also the nerve centre to provide the life support system to the
entire economy and the need to have an efficient system free of corruption,
loot and to act as a harbinger of ups and downs in the economy through
capturing vital information on the movement of funds, end use of funds, and
generation of wealth in the economy among institutions and individuals in
monetary terms is paramount at this crucial juncture when the Government is placed
in a catch 22 Situation to put the economy in fast track and augment the
resources from within the economy but scattered all around without any trace.
As bankers’ bank and Regulator of the entire financial system along with SEBI,
PFRDA and IRDA, the Reserve Bank of India as an Internationally Recognised
Central Bank of the country for its professionalism has a major role to play
with adequate autonomy but with full accountability to the parliament ensuring
that the Financial system delivers with conviction and full transparency on the
sound performance of the Industrial, agricultural and services Sector. Monetisation
of non-monetary resources like Gold, Silver, idle assets scattered in different
forms is the need of the hour and identifying nonperforming Assets in whatever
form they may be and converting them into performing assets through conduct of
surveys, guidance, support with a missionary zeal need focused attention and
meaningful result oriented action from the Reserve Bank.
Real Estate and all related deals
like purchase, sale, lease, rentals etc continue to generate black money in
different parts of the Country and the only way to eliminate black deals is to
tie them through bank accounts. Without the involvement of banks, no real
estate transaction of any kind irrespective of the amount involved can take place
should become a law and the necessary administrative mechanism should be in
place to ensure that no transaction gets escaped from banks. There should be
proper tie up of Registrars, banks and parties involved in transactions. Initially
the tie up can be made obligatory in Metropolitan and Urban Centres insisting
on Aadhar and Pan Numbers. Information Technology can be put into optimum use. Stamp
Duties and other related expenditures, tax etc should reflect separately in the
deals so that evasion of taxes and generation of black money can be to a great
extent minimised though not totally eliminated at least to start with.
Lots of unauthorised shops and
business establishments operate throughout the country with and without the aid
of formal and informal financial system and they are the main sources of black
money, corruption, evasion of GST, exploitation of labourers and practitioners
of all imaginable and unimaginable unethical ways of doing business. Likewise, lots
of commercial activities do take place in large metropolitan and urban Centres even
without any name boards or formal appeals but taking advantage of social
networks and laxity of any regulatory or supervisory mechanism or even the feel
of presence of authorities. They largely deal in cash and do not seem to be
figuring in any sort of data on employment, income or services etc.
It is time now to involve people
from all walks of life in the development of the Society and the Economy through
enhanced and effective administration and transparent accountability for all types
of economic and commercial activities for creation of wealth and its equitable
distribution ensuring welfare for all. The Resources are available but needed
to be tapped and accounted for.
Dr T V Gopalakrishnan
