Kalpajit Saikia
(The writer can be reached at kalpajitsaikia@gmail.com)
A couple of days after Union Finance Minister announced a cut in the corporate tax rate, I met the Chief Financial Officer of one of the largest FMCG (fast-moving consumer goods) companies of India. Contrary to my expectation that he will be elated with the government's move as this will add good 3-4% to his company's bottom line, he was very upset at the decision. According to him, the government has lost a golden opportunity to utilize the special dividend received from the RBI a few days back. It's a story of wrong medicine prescribed for a non-existent disease, he said. While the government is trying to address issues related to supply, the corporates would like the government to address the real issue, the demand.
Similar criticism is heard after the recent announcement of Rs 20 lakh crore stimulus package by the government. Critics say, only around 10% of this package can be called stimulus and will go to the hands of the people, the remaining are loans to Industries which will make the economic situation worse. There is enough unutilized capacity in the economy and additional funds provided in the form of loan will be used just to meet the operating expenses to keep the businesses afloat resulting in widespread credit default after the initial moratorium period. This explains the reason of the bank's reluctance to fund the corporates despite flooded with liquidity post RBI's policy changes.
The demand situation is really very bad. There are salary cuts and job losses in the corporate sector. The government employees are unsure about predictability of monthly salary. The migrant workforce is unemployed and struggling to make both ends meet. No new projects are initiated because of expense cuts by the governments. With no spending and massive excess capacity, the companies are bleeding.
The only way to stimulate demand is to put money in the hands of the people and encourage them to spend. For this, the government must embark on a mission of creating assets through infrastructure development and thereby generating employment at massive scale. The golden quadrilateral project under Prime Minister Atal Bihari Vajpayee saw intensified economic activity in the country and contributed to the spurt of growth in the subsequent years. There was significant provision for Infrastructure spending in the stimulus package of 2008 after the global financial crisis. Apart from kick-starting economic activity, the assets created from these infrastructure projects also help in accelerating economic growth by attracting new investments. It's time for another round of large infrastructure development initiative from the government. Assam's story of a new life in its economy can revolve around the mighty Brahmaputra.
The Brahmaputra has always been a source of extreme emotions for the people of Assam. While the river is the lifeline for the people both economically and emotionally, it is also a cause of unending woes for the people living on both the banks. The fertile lands of Assam where cultivation requires lesser effort is the blessing of the Brahmaputra. At the same time, the yearly floods and erosion have brought immense misery to the life and livelihood of huge number of population. Since 1950, the mighty river has consumed an area bigger than the size of the State of Goa. Every year, an area equal to the size of Prayagraj is consumed by the mighty river. Before every monsoon, the Government spends a lot of its resources to strengthen the embankments with limited success. There was also a sporadic effort of dredging the river with no visible outcome. Lack of integrated approach of combining the objective of disaster management with a larger goal of economic development is the reason of failure of these initiatives. There is no better time than this to convert the Brahmaputra to a strategic asset and bring a revolution in Assam's economic journey.
The entire stretch of the 890-km national waterways from Sadiya to Dhubri can be developed as the economic corridor with a vision of Industrial development on both the banks. The infrastructure development work required for this will lead to immediate economic boost and future economic prosperity of Assam. The starting point of this project is lowering the base of the river to ensure movement of large vessels and strengthening the banks to stop any more horizontal expansion of the river. This will also resolve the issue of the yearly ritual of natural disasters. Wherever feasible, lands should be reclaimed and use it to either build Industrial areas or tourism infrastructure. The ports and Industrial parks should be developed in designated locations on both sides of the river. The infrastructure of the ports and the Industrial parks should be dependent on the specific type of Industry the government intends to promote. Major and minor ports should be developed keeping in mind the projected traffic and targeted turnaround time of the vessels. The development of feeder routes to the waterways should also be a part of the project. Along with the promotion of manufacturing economy, the focus of the development of the Brahmaputra should also be tourism development. The small river islands should be developed as tourist parks with world class amenities. River cruises should be promoted with a strong linkage to rural tourism. The beautification of the riverbank should be given immense importance.
The question is how the government will execute this. To start with, the government should have a clear vision which is compelling enough for the Central government, funding agencies and private enterprises to be involved in the initiative. The project of this scale cannot be delivered without making it a national initiative and for this, sponsorship of the Central government is mandatory. The delivery of the project can happen with close collaboration with the private enterprises and low-cost funding from friendly governments. There must be a business plan which can articulate the cost benefit analysis of the project for each stakeholder. The State government should build a strong organization to conceive the vision, promote it to the stakeholders, transform it to an executable project and manage it end-to-end. The citizens of Assam should be taken into confidence in each step and every detail of the project should be transparently shared.
But the purpose will be completely defeated if the government turns a blind eye to the interest of the indigenous population and sustainability. The development of the river should boost the agrarian economy rather than destroying it. While controlling the river will help the flood affected population, it's equally important to protect them from possible exploitation by Industries. The land rights of the indigenous people should be protected and the clear guidelines for the businesses should be formulated and enforced. It is a well-known fact that the mighty river fights back with massive force if someone tries to exploit it. Extreme care should be taken to ensure the riverine ecosystem is least affected in the process of development. Highly polluting Industries should not be promoted, and government should ensure that there is least impact on the ecology because of movement of the vessels in the river. There should be specific laws to protect the forests and care should be taken to save the lotic ecosystem.
The great Dr. Bhupen Hazarika in one of his immortal songs castigated the Brahmaputra for flowing silently when countless people on his banks were suffering. It's time to break the silence and to wake up the giant Mohabahu.