UPA regime’s decisions will torment successor
like a marauding army on the retreat, the Congress-led UPA Government is slashing and burning the ground and making it as difficult as it can for the next regime to set the floundering economy right. What else can explain that, months before the lok Sabha election, the Government has taken two major decisions which will leave the new regime the onerous task of filling gaping fiscal holes which the latter has not createdIJ The first of the two decisions is to promulgate the National Food Security Act. In one fell swoop, and that too through an ordinance and without debate in Parliament, the Government has burdened the economy with Rs 57,000 crore that will have to be raised in 2014-15 alone towards meeting the provisions of the Act, including the maternity benefits specified.
The Congress-led regime has brought the Act despite stiff opposition from not just the national parties like the BJP and the left — who, though not opposed to the Act, are in favour of an amended version — but also regional parties such as the AIADMK, whose supremo has slammed the Act as “useless, confused and misguided”. Towards meeting the obligations of the Act, the Government, which has barely a year left to complete its full term, sought it wise to set aside a whopping Rs 90,000 crore as subsidy. The second decision that will leave the new regime with the unenviable task of managing numbers that have already spun out of control is the hike in gas rates. Only a few days ago, the UPA Government controversially decided to double gas prices for producers. Apart from the allegation that it was done to favour a particular corporate, the fact is that the move will have a cascading impact on the economy and leave the new regime with another inherited mess to handle. The costs of transportation and, therefore, of essential and commercial products that are ferried across the country, are bound to rise and fuel inflationary trends. Urea production, which depends on gas, will also be adversely impacted and the cost of fertilisers will rise. The new Government will have to bear the brunt of the UPA regime's fatal decision, as the subsidy to be set aside for fertilisers is expected to shoot up to a staggering Rs 65,000-plus crore in 2013-2014.
Just these two decisions alone from the many harebrained ones the UPA regime has taken in the nine years of its misrule will put the nation's economy in a tailspin. As these schemes roll on, the costs of implementing and sustaining them will rise; and so will be the fiscal drain as a result of leakages that will arise due to poor infrastructure which exists, and the absence of a suitable supervisory mechanism. The new Government, caught as it will be, struggling under the weight of those burdens, will be left with limited manoeuvring space to implement its own roadmap for economic revival. It may have to revisit these schemes to make them viable.