“I am the chief economic adviser, not the chief political decider,” chief economic advisor Arvind Subramaniam said in response to a question about whether the suggestions in the Economic Survey 2015-16 will find space in the budget.
But, you are an aspirant, aren’t you? And in a rare case that the interview panel grills you on your analysis on the Economic Survey, here’s what can save your ass!
#1. Do something urgently on subsidies
The survey lists seven items – kerosene, electricity, LPG, railways, petrol, diesel, aviation turbine fuel and gold – on which the implicit subsidy to the rich amounts to RS 10 lakh crore! “. . . rectifying some egregious anomalies may be good not only from a fiscal and welfare perspective, but also from a political economy welfare perspective, lending credibility to other market-oriented reforms,” the Survey says.
#2. Work seriously on ending tax exemptions
- No profession should escape the tax net
- Clear reference to agricultural income, which is not taxed at all
- While the government is working on ending tax exemptions for the corporate sector, what about the agriculture sector!
#3. Don’t raise exemption thresholds
- The Survey junks the theory put out by Thomas Piketty that India under-taxes and under-spends
- Bring more people under tax net. Let the threshold stay where it is!
#4. Spread the JAM (Jan Dhan Yojana, Aadhar and Mobile transactions) trilogy to new areas
- How to go about it? What about its efficacy? The Survey suggests doing this based on two criteria – the extent of leakages and the extent of central government control
- Subsidies with higher leakages have larger returns after introduction of JAM
- It will be easier to roll out JAM in areas where the central government is the main provider of the subsidy
#5. Focus on easier exits
Not just about corporate exits! The Survey expands the paradigms of exits
- Allow easier entry to encourage competition; address legal lacuna through laws (which is being done with the new bankruptcy law)
- In the case of agriculture, exit from the current cereal-centric, regionally concentrated, input-intensive policies to pulses-oriented, regionally-broad based, more-for-less inputs system
#6. Undertake serious reform of the fertiliser sector
The Survey suggests a cap on the number of subsidised bag each farming household can purchase and insistence on biometric authentication at the point of sale (POS)
PS: This was just a trailer. Original series on Economic Survey with back2basics reference coming soon.