In my service life while I was on official tour to different places, very often I came out of the hotels to enjoy foods outside the hotels. I remember a very minor but significant happening in Kolkata.
I was staying at the Samilton at Lansdown, near Chakraberia – that was my first stay at that hotel. For my breakfast, I would come out to take that at a small restaurant nearby the hotel. In the morning hours, unless luck favored, I had to wait outside the restaurant for more than quarter of an hour to occupy a seat inside.
I noticed how the restaurant could provide different dishes at prices far below the prices for the same items in Guwahati. That tempted me to ask the owner of the restaurant one day, as to how he could offer almost all the items at such rates far below the rates at the restaurants in Guwahati.
The gentleman with a mild smile replied that he knew that, but his philosophy was altogether different and that was: even though the profit margin per item was not much, he indeed believed in an extensive customer base- because that ensured satisfaction of the customers while at the same time he also earned profit.
He continued telling me that customers’ ability to pay was his most major outlook.
What relevance I want to draw out of that small but significant incident is that in determination of the market size, price plays the most vital role. Now, the government of Assam is under commitment to fulfil numbers of welfare measures which include free distribution of goods to distribution of cash in different names and styles under different schemes and waiver of microfinance loans, etc.
In the meantime, for increasing the amounts of the benefits, most of the beneficiaries under some of the schemes have started raising their voice. If reports are to be believed, only for waiver of microfinance loans, the government will require Rs. 12,000 crore approximately.
The prime focus now is on the sources of the government revenues for financing those schemes. But unfortunately, as alleged, the second wave of COVID-19 pandemic caught the government unawares at least as regards its gravity. Before showing the green shoots, the economy got the second severe strike.
MSME sector in the state is the hardest sufferer, putting a number of employees in great financial distress. Reverse migration has once again started making the state’s economic scenario to further worsen since their engagement in MGNREGA is not at all a satisfactory replacement of their earlier engagements.
This is leaving aside the more pathetic fate of those who did not even get that.
Presently, business activities up to 11 a.m. is a point for the government to claim that the business community has been given sufficient scope to earn. The customers have been made to make purchases within that period.
Resultantly, instead of going back from the market with empty bags or with purchases of hardly few items from the list for shopping, people are found to be thronging the markets, flouting the Covid protocols. Unsold perishables are thrown away not finding any customers even after exorbitant discounts.
The owners of the business houses are ready with their plea of meager revenue not capable of meeting the employees’ demand for salary adequately. A large number of people with an everyday increase in numbers have become debt-ridden.
The most serious problem for the economy of the state is the fast deceleration of purchasing powers of a certain section of the people who do not get any of the above-mentioned government blessings, scripting the ascending graphs of their woes showing how they are on the rise.
Unless sales volumes in the market increase, taxes to the government exchequer will not increase. For increasing revenue, in the context of Assam, the government is left with no other readily available option than to increase tax and that what often, as observed, the government does.
Resultantly, the sale prices of the commodities and services go up. Herein at this juncture of the state’s economy, the above-explained restaurant owner’s strategy holds good. The government of Assam must increase the purchasing powers of the people for expansion of market.
Even though only for theoretical purpose, the government may find satisfaction in absorption of growing numbers of people in the state’s agriculture sector, considering the reality, is it not a fact that neither the farmers nor the government has done anything towards improvement of agricultural production and productivity?
Rather, with increase in the number of persons, productivity is rapidly going down. In this context, a case study of utilization of agricultural land in Punjab and Haryana will be very relevant.
As observed, a number of beneficiaries of freebies have abandoned cultivation in Assam. Of course, I am not inclined to blame them only, government impetus to keep them attached to their profession lacks thrust. As if, since other states cater to most of our day to day necessities including rice, lentils, sugar, and milk, the people of the state are not having any reason to worry.
It is time for the people to realize that their averse to doing works is not only their greatest enemy but is making the state poorer day by day.
While I urge upon making most efficient use of agricultural land including scientific methods of cultivation as well as utilization for maximum possible period in a year, since how long status quo will prevail in the agriculture sector is not known; instead of burdening the agriculture sector, focus must be shifted from agriculture to industrial development for opening new vistas for more fruitful utilization of the human resources.
After all, the customer base with enhancement of purchasing powers of the people for meaningfully increasing market participation is the greatest challenge before the government to take a major burden away from amassing on the shoulders of the middle class people.
Similarly, with more output for the purpose of meeting the growing demands in the market, the improvement of the financial conditions of the producers will mean conducive atmosphere for industrial growth on one hand and enhancement of government revenue out of the taxes on their sales proceeds on the other hand.
The entire process will require a very professionally competent approach on the part of the government. For embarking on doing improvement of industrialisation, since long I have been too keen to know time-bound plan for reviving some of the dying industrial units including the paper mills at Jagiroad, Cachar, and Jogighopa, APOL at Tulsibari, Prag bosimi Synthetics Ltd. at Sipajhar, and the tea gardens under Assam Tea Corporation, etc.
But, to my utter surprise, it has been reported that instead of accepting the challenges to revive the paper mills at Jagiroad and Cachar, the central government has already taken decision to auction them. Now, a very straightforward question to the state government is: if the bidding parties for such an auction can have confidence in thriving the units, why the state government cannot?
True, these are central government undertakings, but why could the state government not impress upon the central government not to proceed with actions for auctioning those two industrial units? If this is the beginning of handing over the sick PSUs to the private sector in the state, it is likely to be very unwholesome for the state’s economy.
To boot, no less important is the indispensability of increase in productivity of the human resources in almost all the industrial concerns under the government and that will require a professional study of requirement of proper manpower training and determination of requirement of human resources in the organizations.
It deserves a timely mention that no professional management keeps extra manpower, since extra manpower is detrimental both for the productivity of the human resources as well as for the profit of the organization. Consequent on that exercise of the government, it will be able to deploy the surplus manpower very suitably with further expansion including ramifications.
I am too sure, with the prevailing set up, for the government, it is almost impossible to accept such a challenge and in transformation of that, the government, apart from other professional challenges, is likely to face stiff resistance from within the prevailing system.
But if real turnaround of the economy of the state is honestly desired, to me, there is no other pragmatically result-yielding route.
The more the time the government takes for facing the challenges, quite likely, the greater will be the dimension and seriousness of the problems.
Therefore, for last so many years through my different articles on the economy of Assam, almost regularly I have been urging on the government to rise to the occasion to deal with the matter with a sense of commitment to perform expeditiously, and now I am afraid that we have arrived at such an impasse that failure to recognize the problems and act upon them will invite more and more problems to the economy with resultant more and more sufferings to the people with very unbridled progress of the economic downturn.
Almost every day, prices of most of the essential items are rising. The government also seems to be not that tough to deal with the matter rather efforts for justification in some of the cases are really very surprising. For instance, the justification that the minister, food and civil supplies has put forward justifying price rise of mustard oil in the state, is not at all convincing, rather, quite surprising.
Business concerns pay taxes on their incomes as prescribed for the purposes. That means, the more the profits, the more will be the taxes.
Most of the companies try to increase profit by increasing the prices of their outputs in the market.
While the burden of such rising price is borne by the people, the prise rise gives the companies more profit and the government also gets more direct taxes as well as more GST on the enhancement of the price of the output.
However, direct taxes go straightway to the central government.
Every move of the government must ensure justice towards all the stakeholders and there the real challenges are lying. But frankly speaking, I am very cynical about any such expeditious move of the government to ensure both economic progress through furtherance of industrialization and alleviation of the financial sufferings of the people as I have already elucidated.
Hence, I am not left with any other option than calling upon the government to make its sincere and serious efforts to show its capability to accept the challenges and stay in the reckoning.
Otherwise, in the days to come, more and more sufferings in all fronts such as price rise, rise in unemployment and closure of industrial units etc. are imminent to the suffering people due to the failure of the government to handle the state’s economy efficiently.
And in view of that, time is ripe now for us to raise our voice against any further burden on us, being the only remedy available with us.
(The author, Satyajit Kumar Sharmah Thakur, is a Guwahati-based advocate. He can be reached at [email protected])