ECONOMIC REBOOT POST COVID19 PAUSE....HOW?

The world has go through a Renaissance, the world has to go through paradigm shift..

As stated in Hindu mythology that during the transition from one yuga to the next one, humanity goes through the events which are life changing in nature.

Kalyug went on to become stronger and stronger. A lot of events started happening. It was just not the first World War I and II, Great Depression, the plague and other things the pattern of disruption, which has been continuing in the last about 200 years.

But let's start talking on my main agenda today – That is Economy Post Corona Pandemic. As we know all economies are going to face slowdown, recession or rearrangement of product services and ingredients of economy. So here are my views how we can revive and kick-start our economy again.

 I strongly believe that if we have to restructure our self, if we have to strengthen our self, if we have to resurrect economically, we should stop thinking about the global economy and be independent of it. We should not be bothered about anything but self-interest. The biggest and the most important element that India has is that it constitutes of almost one sixth of the world population. What we produce should not be centric to the demands of other countries but conducive to the Demands of our own population.

Let me explain it to your further. In the Olden Times there used to be a proverb that:

Said that the elementary things that we require for our existence are Roti Kapda Aur Makaan.

And a fully supported roti will target agriculture its produce its production and its consumption. Which would definitely bring movement in our economy by bring disposable income in the hand of rural India.

The certain steps that need to be taken in order to make India a food secured Nation.

 

1.   “More Crop, More Yield Per Acre” should be the fundamental on which Agricultural University should be working upon.

2.   Immediate and drastic changes in APMC laws so that the intermediaries should not be taking advantage of the farmer which makes him more stressed. Nation needs a stress-free farmer for growing better crop and generating better yields.

3.   We should redesign an infrastructure on card based electronic clearance system for agriculture produce sales, intermediary’s payments, purchase of equipment, seed, fertilizers through the same card based system. Which simply means to revamp and strengthen the Kisan credit card system.

4.   Food processing unit and strategic setting up of the same is the best way for reducing the wastage of crops. Food processing unit should be established in accordance with crop pattern and crop yields not to forget storage facilities have to be revamped for or better results.

5.   Another major issue is that the reduced farm size as family expand A mechanism to develop and land pooling system for agriculture should be introduced, that will help in reducing the expenditure input for the farmers.

6.   loans should be made conveniently available through card based electronic clearance system. With the Caveat that payments can only be made in regards to purchasing of agriculture equipment SEED or supporting activities. One cannot buy a car or take out cash for expenses personal in nature, for all such activities a farmer should be taking a personal loan or other means to service their needs.

7.   Agriculture policy must be redrawn with the vision of a targeting 400 metric tons per annum, of food grain with targeted growth rate of 6% every year.  as a nation food security is one of the most important issues under the consideration of any government. We as a nation should start looking at avenues where agriculture can be done and land is available on economically favourable terms, manpower is not an issue for us.

8.   A full focused approach towards meat products should be formulated where and goats, sheep’s, chicken and fish should be also termed as priority agriculture which would also help us for domestic consumption and Exports.

9.   Milk and milk products need attention; some farmers say they don’t get good rate these areas must be identified and processing units must be commissioned in such area. Aim is to save, process the last drop of milk and increase its production.

Reduction in input cost for agriculture must be an ever evolving mechanism.

When we used to talk about Kapda it was just not the farmer who was producing the Cotton, and the factories that were producing other clothing material but also all the manufacturing industry.

No Nation can develop and attain target it sets for its development if the industry does not perform as per design or at the optimum level.

 

Electronic and electronic equipment’s,

Consumer goods,

Battery and power storage equipment, 

Food processing,

Defence manufacturing,

medical equipment and pharmaceutical industry.

Heavy industry

should be the focus area.

Special industrial / manufacturing zones to be developed with single window clearance system for any production unit migrating from China irrespective of size. Indian company should be given some extra incentive. As stated above the focused area above should be incentivised. Land acquisition should be under SPV authorised by an act so as the problem of delay should be avoided. SPV in each state / UT should be 50:50 between state and centre.

The automotive industry is a very important for any country the nation should start thinking about investing into its Automotive sector for its transformation from fossil fuel based automobiles to Electronic base mobility systems.

Infrastructure development is one of the most critical Areas where government expenditure gives thrust and incentive to economy.

critical infrastructure activities like setting up of nuclear power plants to fulfil the energy requirement for transforming from fossil fuel to Electricity would be e a very important area.

Another major and important expenditure into infrastructure would be to fulfil the dream of late Prime Minister Atal Bihari Vajpayee of linking all river and water systems of India and creating a water grid which can utilise water for better productivity across Nation and also help us in water based mobility solutions. Water is a natural resource hence it should be the responsibility of the GoI to distribute it on same principal to all states.

Access controlled superhighways with new alignment would not just only reduce time but also better time management of delivery chain. Nation with strong excellent road networks are catalyst for exponential growth.

Redesigning of the national mobility infrastructure should be based upon “travel time productivity and not cost of construction”.

And last but not the least Makan that means housing construction infrastructure.

We all know very well that construction activities directly and indirectly impact about 250 Or more product lines. It is very important that incentives are given by the state and central government to uplift the real estate industry. There should be reduction of stamp duty. All transactions with 25% value above the prescribed Circle rate of the district, should be incentivized by reducing the stamp duty by 25%. If transactions value is between 25 and 50% then a discount of 30% should be given and if the transactions value is above 50% off of the circle rate, then purchaser should be rewarded by giving a 50% discount on the stamp duty.

It is just so nice to talk on all such matters in our comfort zone, but we should be clear on what to do and most important what not to do. India as a nation must not get bothered about what is this Global demand for it to produce in its factory but we should be concentrating onto an aim of a creating local demand and servicing local demand only. And that would be our prime objective and this is what we can shed our thoughts on.

Before we do that we should also understand that there are few things which in any case we cannot produce our self and that is oil. We should not get bothered about our oil imports till the time oil remains under the level of about USD70 to a barrel and also the Rupee to Dollar should not cross above 95 as a stabilized benchmark rate for transaction.

Those of you who are reading me now, would be definitely thinking…. dollar hitting 95 Rupees is not something which Indian economy can sustain. But let’s put it this way, I think we should first focus on limiting our imports. The few things that India should permit in the New Era for imports should be Defence, oil and Technology. (Make in India in defence supplies of consumables, should be a priority. Defence consumable import should only be permitted till we do not start production in India, that too in a time bound manner. Defence imports for War situation preparedness cannot be compromised with).

We should launch a new scheme Covid19 bond scheme , any money from any source deposited by an Indian national or a PIO in these bonds will not attract any scrutiny by the income tax authority’s. The period shall be of 19 years and will carry no interest what so ever paid to them. At the end of this term it should be treated as in with the provisions of section 54F of the IT act and the amount will have to be invested into real-estate or Long term capital gain bond for a period of not less than 3 year after which the proceeds would be considered as Legal tax paid income in the hands of the accesses.

Another very important thing that India should be doing henceforth is buying gold at all right price points. I strongly feel all gold that is mined and processed in India should be directly going into the monetary reserve. Importing gold is another major cause of foreign exchange outflow. I think barring the taxes collected in the present circumstances on gold it should become mandatory for importers to deposit 33% of this import directly into monetary reserve. The only exception should be the gold used in the manufacturing of electronic components like chipsets and circuitries. Not to forget that if gold imports for jewellery by India is minimised then international gold price will head deep down south.

The government must give permission to re mould Gold jewellery by the womenfolk but mechanism should be created so that the amount of gold utilised remains the same or increases but not reduces. Anybody intending to sell gold has to mandatorily sell it to the Government of India or any of banks who will pay money to the seller and deposit the same into to the government and take money from the government that they have paid to the seller.

 We need to make sure that money should not be a problem for any business be it agriculture based industries, Real-estate, construction Greenfield projects, R&D etc. The government should become venture capitalist. Stocks of all successful Ventures in which the government has invested, such stake held by the government should later on be offered as IPO( initial public offering).

At no point in time, these new Ventures should have more than 40% holding by any Non-Indian identity, directly or indirectly. All identities either an Indian citizen or a business identity with 75% stake owned by an Indian citizen should only be considered as an Indian identity.

Real-estate market situation, also is a diagnostic report of the health of an economy. Making sure that the primary focus should be, 80% sales target for all real estate development happening in the country by the completion of the project (roll of DTCP and other licencing authority will also be looking into projected financial feasibility of the project). By doing so controlled inflation as well as circulation in economy and money in the hands of almost everyone can be e achieved. We would be talking about “make in India, for the India by the Indians). 

As a policy decision we should be clear that henceforth no change of land use should be permitted beyond the present city limits (no new city masterplan for horizontal expansion of city and towns should be awarded for Residential and commercial Real-estate projects). Food basket for India is an important area that we have to address, agriculture land and optimising Agriculture produce on the same has to be a Priority area for the government.

This would not only secure the food basket for the nation but also become a stimulus for real estate prices to grow. Redevelopment should be an important area to be addressed.  Downtown and City Centre area should be developed and FSI added by increasing it vertically, which would make it easier for the government Agencies to manage cities.  for example, a government office constructed in 10 acres’ land with 1 million square feet instead of which another office made on 5 acres, 70-80 floors having area of over 4 million square feet area would be the way to go forward.

Devalued rupee in this given scenario can only affect us on limited accounts that is oil, defence and technology transfer. But it will not impact us in long term as we will be making counter realignment to these impacts as we keep moving forward.

Driving elements such as energy for a growing nation is also very important, for which I think that India should focus towards commissioning indigenous nuclear power plants. Most of India is bright and sunny for over 9 to 10 months in a year, it should be made mandatory to have 50% exterior of high-rise building be made of solar cells. All lamination should be LED or any other more viable lighting solution.

having spoken about energy rupee and areas to look into let's start talking about the matrix.

The most important thing for real estate is liquidity which as I spoke earlier would be made available, if we print more than the Rupee is going to be devalued. The second thing is availability of money in the hands of poor and rural India will make our economy robust. The backbone of Indian economy- rural India, they would have the money to spend.

This ecosystem would definitely want some changes in the way we live. Like travel for leisure out of India should be prohibited for some years. Al non-essential luxury activity expenses should not be done; as foreign exchange outflow would be increased. which would not be a conducive thing in implementing this idea. By doing This, it would definitely make the Indian hospitality sector robust, innovative and lucrative which would definitely increase a lot of local demand.

I further also think that's sale purchase of any new luxury automobile should be prohibited in fact cars beyond 35-40 lacs should not be allowed for sale in India till a few years (if they are not 100% made in India) when we would have transformed our self as we desire to. By turning India into a hundred percent electric vehicle based mobility system in time bound manner we will also get free from OIL import and forex expenditure will reduce.  I further propose that to give an imputes to the automotive industry any one changing seven year or more old vehicle from fossil fuel to Electric mobility should be given minimum Rupees 1 lakh or its IDV whichever is more with a capping of rupees 3 lakh excluding the subsidy granted at present.

I further think that Development of Defence manufacturing facility should be another important target for India. from the shoe that the solider uses to the   amination that is going to be fired out his gun or the smart bombs used by our air force or the torpedo fired by our navy all of it should be made in India. Like we are producing Missiles indigenously.

 

It would be ok if we do not have 15000 kilometre range missile, but it would be important that we have ample number of aircrafts which are manufactured in India and the technology which is developed in India.  we should have maybe 5000 contemporary supersonic combat aircraft which are made in india and in case of War we should not be bothered about losing them.

Another important thing that I feel that we should now focus on is creation of “Indian teaching services” on the same levels of “IAS” which would definitely create a solid backbone for the future of India education. Education reforms demand longer gustation period to deliver results, but if we are able to create a system like the civil services into education, I am certain about one particular deliverables and that is that the brain drain that was happening in India for the last five decades will stop and rich dividends would be attained.

It should be imperative to re-defying Standard classification of an A Category City, these cities should not just have a Medical College, Engineering College, sports college an research and development centre but also MRTS, smart grid, Online delivery systems of government services and waste to energy plant.

India is highly placed in Pharma and Healthcare sector; we have a demographic advantage which we should not lose at any given point.  with the population almost 1.4 billion people we are sitting on a gold mine.  we have the most wonderful mechanism which delivers even with 1.4 billion people. We would have the best mechanism of unique biometric identification which is touching hundred percent. Look at it with a vision that all sales of medicine and every consultation or procedure with a doctor should be linked with Aadhar number.  which would create a data pool that would help us create Research and develop almost anything that we Desire in the field of medicine and procedures because we would have the biggest database to research on and understand the patterns. This will also help in better implement ayushman yojna of the government.

I further think about another important issue and that is the execution timeframe and implementation horizon of this plan. With the brain available and if people sit for drawing the execution plan for this idea it should not take more than 6 months to plan, do simulative check-up and fine-tune   it. What happens and how much time would it take to execute all of this I strongly believe that if any government for setup people want India to resurrect as the biggest superpower post Corona endemic in the Re aligned word India need these 15 years of strong determined approach to claim its right full place.

 I strongly believe for attaining this being a democracy the best financial minds and legal mind should sit with us road map creates the desirable objectives desirable procedures and the timeline for attaining this in the minimum possible period which I believe would be 15 years. Indian democracy doesn’t have provision of referendum on issues, in our democracy set of policy and aims of political parties are put to referendum in general election. Hence as special case not setting president the nation should give a referendum on these set of policies and no government elected in the period of next 15 years will be able to change these goals. There can be no deviations of agendas barring the agenda fixed under this referendum.

Another major factor that needs to be address is the direct taxation what I think is that the income tax slabs should be reduced by at least 50% across the board. Further a 2% Transaction Tax must be imposed on all transaction which are made by non-cash instruments and 4% transaction tax on all transactions above rupees 1000 this will give the treasury to do the needful expenses. In the same way GST should be altered with 50% rebate on 100% made in India goods and a surcharge of 30% Imported, assembled, CKU SKU products.

Government its leaders and people supporting the leaders can come and go but what cannot and would not be let go of would be making India strong, proud, resurgent and independent knowledge financial and defence super power. 

RAMAN MALIK