TODAY -

Union budget 2013-14 and inflation

Prof E. Bijoykumar Singh *



Everything seems to be topsy-turvy when inflation continuously erodes your purchasing power. When I joined Manipur University in 1983 my first pay packet was something like Rs 1400. My grandfather, an elementary school headmaster, earned Rs 12 per month. With that amount and proper fund management by my grandmother he could establish himself reasonably well in life. He could provide post graduate education to all his children. Gone are those simple days when hard work used to get rewarded.

Now I wonder whether in spite of everything I am better off than my grandfather. Inflation or the rising level of price is the main actor behind this drama. Other actors are supporting casts coming into picture to safeguard our purchasing power. We need lots of money to meet our requirements. We become disoriented when inflation erodes our purchasing power.

A person may be corrupt because he needs money to educate his children and there is ample scope for taking bribes. A person enters into illegal trade because he is convinced that he can make quick money and probability of getting caught is also low. Even if you are caught one can bribe one's way out. In fact there are infinite ways of earning quick money.

Every year whenever a budget is presented one hotly contested issue is the inflation rate likely to be generated by the various measures announced in the budget. The ruling party will claim it to be pro growth and less inflationary while the opposition routinely will denounce the budget as inflationary. No doubt a budget is a big thing but one should not attribute the entire story of growth and inflation to the budget. Much of our current crises are associated with global events- thanks to globalisation.

The sub-prime crisis in the USA overwhelmed the international financial system. In India we nearly missed having runs on our banks. Y.V. Reddy, the former RBI governor and Chairman, XIV Finance Commission was given the credit for saving the economy going the European way by his steadfast refusal to introduce full currency convertibility in India.

Our FM did not succumb to the need for populist measures, this being the last budget of UPA-II. Injecting additional money indiscriminately would have been like disturbing a beehive of inflation without any protective gear. One is amazed at his restraint. It becomes clearer when the underlying theme of governance and objectives of the budget are spelt out. Higher growth leading to inclusive and sustainable development is the underlying theme of the government. The FM has spelt out his objectives to link policy with welfare as follows:

"To create opportunities for our youth to acquire education and skills that will get them decent jobs or self employment that will bring them adequate incomes that will enable them to live with their families in a safe and secure environment."

This statement is interesting because the employment our FM is talking about is not the employment we have based on time criterion. I have always argued that such measures should combine both income and time criterion. The kind of employment with a monthly payment of Rs 4000 after working 10 hours a day is not the kind of employment our FM is talking about. He is talking about remunerative employment.

The main causes of inflation in India have been imported inflation as in the case of crude oil, supply demand mismatch as in the case of oilseeds and pulses and rise in aggregate demand as the economy grows. Though inflation based on WPI has come down to 7% and core inflation to 4.2%, food inflation still remains worrisome. It means the rate of growth of prices of food items is still high. As it has a high weight in WPI, inflation rate may again start rising.

Goods whose excise duties, sales tax rates and import duties are raised become costlier and a budget is inflationary to that extent. Duties on raw silk and set top boxes have been raised from 5 to 15% and 5 to 10% respectively to protect domestic producers. The duty on luxurious motor vehicle and motor cycles has been raised from 75% to 100% and that on Yacht and similar vessels from 10 to 25%.

Specific excise duty on cigarettes, cigars, cheroots and cigarillos has been raised by about 18%. Excise duty on marble is raised from Rs 30 per sq.mtr. to Rs 60 per sq.mtr. The duty on mobiles costing more than Rs 2000 has been raised from 1% to 6%. Not many will be affected because 70% of the imported mobile phones and 60% of domestically produced phones cost less than Rs 2000.

Service tax is imposed on all air conditioned restaurants irrespective of whether it serves liquor or not. Anyone who enters such a restaurant will have to pay a service tax. Those persons who consume them feel the first impact. For me fortunately I am not going to consume any of these items during 2013-14 except for the set top box for my TV. I do not know the difference in price between domestically produced and imported box. I never go to any AC restaurant on my own. My old good Maruti 800 is okay for me. I always purchase sub 1000 mobile.

Even the 10% surcharge on personal income tax is theoretical for me because I am not in that exalted club of 42,800 super rich Indians with a declared annual income of Rs 1 cr. This may be true for all of us in Manipur. However, despite everything we are in general equilibrium. It is not only what happens in the tax rate that is going to affect the inflation rate. Many other measures may raise productivity of factors of production.

Higher productivity leads to higher income which in turn enables us to get over the adverse effect of inflation, however high it may be. Besides, there are many imponderables. A natural calamity overtakes us and budget is abandoned. In spite of such a budget, a few months of blockade may drastically change the game plan. Our vulnerability has not diminished given the resounding victory of NPF in Nagaland.

I only hope the end of the election will also end the hostile posturing of leaders on both sides. Just as our brothers have become exhausted, the Union government also may be hiding its exhaustion which may come out any time.

What our FM said quoting Swami Vivekananda regarding India is equally true for Manipur. Swamiji said "All the strength and succour you want is within yourself. Therefore, make your own future." I only hope he is not thinking about import substitution.


* Prof E. Bijoykumar Singh wrote this article for Hueiyen Lanpao (English Edition)
The writer is Economics Department, Manipur University
This article was posted on March 02, 2013



* Comments posted by users in this discussion thread and other parts of this site are opinions of the individuals posting them (whose user ID is displayed alongside) and not the views of e-pao.net. We strongly recommend that users exercise responsibility, sensitivity and caution over language while writing your opinions which will be seen and read by other users. Please read a complete Guideline on using comments on this website.


LATEST IN E-PAO.NET
  • Colonial Knowledge Production in NE #7
  • Violence in Manipur 2023-2025 : Timeline
  • Make Yourself Visible to Opportunity
  • Orange bowl: tradition with ecological wisdom
  • 10 ways to keep a kitchen garden disease free
  • Between PR, military mandates & AFSPA
  • Allocation fund for MLALAD Fund during PR
  • Denounces Killing of KNA Deputy C-in-C
  • COVID-19: Update 03 July 2025 : Manipur
  • Cases of fake Aadhaar cards
  • Sincere dealing must for stricter Aadhaar
  • Archaeology: Culture of Manipur : Booklet
  • Wanna be a singer? Get Botox
  • A Central institute in Manipur
  • Nagging in the name of love
  • COVID-19: Update 02 July 2025 : Manipur
  • 'Benefits' of Indira's Emergency
  • Social Stigma :: Poem
  • Inking a peace pact: Why, how: SoO quagmire
  • Van Mahotsav under shadow of declining forest
  • 11th Th Kishan Memorial Lecture : Gallery
  • Shinthoibi, Jangvei, Tamphaton : eMing
  • Manipur crisis & the Left media's blind spot
  • COVID-19: Update 01 July 2025 : Manipur
  • Bombom RK : Musclemania Universe NYC
  • The Grief :: Poem
  • Music Concert & Quiz (MCQ) 2.0
  • SoO agreement unlikely to be scrapped
  • Regulating use of plastic carry bags
  • Mera Houchongba @Kangla #4 : Gallery
  • International Day of Yoga @JNMDA : Gallery
  • BD Behring: The inimitable Gentleman I knew
  • Violence in the name of patriotism : Misguided
  • Daily oral vs long-acting injectable for HIV
  • COVID-19: Update 30 June 2025 : Manipur
  • Smile :: Poem
  • Why was President's Rule imposed ?
  • BJP under pressure to forge unity
  • Kang @Leikai in Imphal : Gallery
  • July Calendar for Year 2025 : Tools
  • COVID-19 : A recurring crisis in Manipur
  • DC Kaith and Forestry in Manipur : Book
  • COVID-19: Update 29 June 2025 : Manipur
  • Longing for Peace :: Poem
  • Black badge, slogan protest by peeved scribes
  • Present the true picture before Delhi
  • Pung-Cholom @ Polo Tournament : Gallery
  • Life: A Journey Through Thought & Being
  • Khongjai Hills & Kuki claim to indigeneity
  • Master Time by Managing Information
  • COVID-19: Update 28 June 2025 : Manipur
  • Pride & patriotism in CCpur's army families
  • The Power of Poppy - 87 :: Poem
  • World Decarbonisation Day: green environment
  • Welcome Home - Nganthoi #2 : Gallery
  • Loss of two precious lives from Manipur
  • Balancing civil liberties with public safety
  • COVID-19: Update 27 June 2025 : Manipur
  • Gender equality & human rights are indivisible
  • Stay hydrated this summer season
  • Silent Half of the Sun :: Poem
  • Connecting the dots in the wishlist
  • Assembly record tampering claims by ex-CM
  • The immortal legacy of Pukhramba Kajao
  • International Day against Drug Abuse 2025
  • COVID-19: Update 26 June 2025 : Manipur
  • Black pottery from Ukhrul - tribal heritage
  • Program on "Mission-Drug Free Campus"
  • Play makes a better world
  • Urgent Appeal to the Honourable MLAs
  • Tribal Empowerment Campaign at CCpur
  • Talk doing the round: PM to come
  • 'Emergency' relief for under-fire BJP
  • Golden Jubilee Art Fair @Imphal : Gallery
  • Declaration: Meetei People Convention, Delhi
  • A Flower Among the Rocks :: Review
  • Book Donation Campaign
  • Improved road connectivity boosts livelihoods
  • To Have Great Dreams :: Poem
  • COVID-19: Update 25 June 2025 : Manipur
  • Regret vs Sorry: Technical & moral insight
  • Cocktail of inept Govt, selfish people
  • State trailing others in cleanliness
  • Colonial Knowledge in NE India #6
  • UHI effect & rising temperatures in Manipur
  • Frequent road blockades cripple economy
  • COVID-19: Update 24 June 2025 : Manipur
  • Unite Health with Community health services
  • NSU, Imphal, tops IIRF Ranking 2025
  • Endless conflict :: Poem
  • Pak nobel pish prize for Trump
  • May 3, 2023 - June 24, 2025: Failure of Delhi
  • Hotter days, sudden rainfall no more a rarity
  • "The Great June Uprising" #2 : Gallery
  • How to Build a Career, Lead with Purpose
  • 2nd Foundation Day- Karnataka Meitei Assn
  • COVID-19: Update 23 June 2025 : Manipur
  • NSCN-IM Amnesty threatens to isolate it
  • Sunset :: Poem
  • Intl Yoga Day for a healthier environment
  • Of clogged drains and plastics
  • Poor roads testify Govt indifference
  • Welcome Home - Nganthoi #1 : Gallery
  • The Silent Erosion of Manipuri Language
  • Design health services around people
  • Serene Hills Host Inspiring Int'l Yoga Day
  • COVID-19: Update 22 June 2025 : Manipur
  • Chopper services between Senapati & Imphal
  • High Court Judges interacted with convicts
  • Redyeing the Fabric :: Poem
  • Differences yet to be resolved stand
  • Border fencing rage as solution eludes
  • Radio E-pao: 14 new songs updated
  • Climate Adaptive Agroforestry
  • Manipur overlooked demographic shifts
  • Young designers shine on Fashion Stage
  • COVID-19: Update 21 June 2025 : Manipur
  • International Day of Yoga at Lamphelpat
  • International Day of Yoga at JNMDA
  • The Power of Poppy - 86 :: Poem
  • Keishampat Lairembi Haraoba #1 : Gallery
  • Crisis in Manipur's Contemporary Education
  • Best 8 Performances in Manipuri Cinema
  • Identity: Caught between China & India ?
  • COVID-19: Update 20 June 2025 : Manipur
  • To The Father Who Listens :: Poem
  • How does net suspension affect youths ?
  • Targeting farmers to cripple state's economy
  • The virus is back and spreading
  • Who is afraid of Manipur ?
  • A threatened lily growing at Shirui Hills
  • World Environment Day in Manipur : Gallery
  • Ambubachi Mela at Maa Kamakhya
  • COVID-19: Update 19 June 2025 : Manipur
  • Dolls made from repurposed vegetable refuse
  • Condemns Attack on Farmer & Killing
  • Abhorrent politics of SoO
  • Police arrogance on harmless drivers
  • "The Great June Uprising" #1 : Gallery
  • Solution from Buddhist & Jain perspectives
  • AI sparks employment concerns in Manipur
  • Greatest Foe :: Poem
  • Chief Justice at Relief Camp, Kangpokpi
  • Call for Recognition of a 3rd Category of IDPs
  • Jun 18, 2001- May 3, 2023: Seed of violence
  • Contract scam in hill districts
  • Colonial Knowledge in NE India #5
  • Spaced Out - Panthung Di Kadaaida! : Rvw
  • Condemns the Killing of Abdul Qadir
  • COVID-19: Update 17 June 2025 : Manipur
  • Thoubal aspirant makes Manipur proud
  • Tamenglong hospital brings quality healthcare
  • Chief Justice at Relief Camp, Mayang Imphal
  • Kuki CM & Sixth Schedule
  • Selective protests, selective silence
  • Nailing the culprits need of the hour
  • UK Meetei diaspora run for Myanmar : Gallery
  • Erwin Khundrakpam : NEET-UG 2025 topper
  • Will we rise to #endAIDS challenge or stumble
  • COVID-19: Update 16 June 2025 : Manipur
  • Appeal to Prime Minister: Manipur Crisis
  • Urges Action on Misinformation
  • Condolences : 2 young cabin crew
  • Grateful To Be Alive :: Poem
  • Making bonfire on the roads
  • Aggression yet again, inspite of playing victim
  • Aftermath of flooding @ Khurai #2 : Gallery
  • Zomia, geopolitics, & the struggle for unity
  • COVID-19: Update 15 June 2025 : Manipur
  • Condolences : Demise of 2 Manipuri Girls
  • Manipur unites in grief after Air India tragedy
  • Hail arms recovery as step toward peace
  • Cleanliness Drive at JNIMS Campus
  • Global Wind Day for a clean environment
  • First came the rain, then the heat
  • Rise in Covid-19 cases
  • Thang-Ta Day @Khuman Lampak #3 : Gallery
  • Meetei diaspora in UK runs for Myanmar victim
  • Manipur empower children with disabilities
  • COVID-19: Update 14 June 2025 : Manipur
  • World Blood Donor Day 2025
  • The Power of Poppy - 85 :: Poem
  • A Northeast Gin Makes Its Mark
  • Mera Houchongba @Kangla #3 : Gallery
  • Saluting Nganthoi, Lamnunthem : Joining hand
  • Condolence : Nganthoi & Lamnunthem
  • 50 years of Pebet #2 : Gallery
  • Indo-Naga Talks (From 2012) :: Timeline
  • Colonial Knowledge in NE India #4
  • Namphake Monastery @ Dibrugarh : Gallery
  • Protest @Checkon -AT arrest [Jun 9] : Gallery
  • Protests - AT arrest [Jun 8 night] : Gallery
  • Aftermath of flooding @ Khurai #1 : Gallery
  • /li>
  • Flooding at JNIMS Hospital #2 : Gallery
  • North East NSS Festival @ MU : Gallery
  • 27th Meira Paibi Numit : Gallery
  • Trump's tariff legacy & its global echo
  • Flooding at JNIMS Hospital #1 : Gallery
  • Flooding Imphal East [31 May] #3 : Gallery
  • Flooding Imphal East [31 May] #2 : Gallery
  • Flooding Imphal East [31 May] #1 : Gallery
  • S Nirupama @Miss Universe : Gallery
  • Protesters to Raj Bhavan [May 25]: Gallery
  • Human Chain @Airport road [May 26]: Gallery
  • Miss Shirui Pageant Contestant: Gallery
  • 48 hrs Bandh: protest security forces: Gallery
  • Protest Rally: Journalist harassment: Gallery
  • HSLC 2025: Full Result (Check Roll No)
  • HSLC 2025: Important Info & Grading System
  • HSLC 2025 : Compartmental candidates
  • HSLC 2025 : Comparative Statement
  • HSLC 2025 : Statistical Abstract
  • HSLC 2025 : District Pass Percentage
  • HSLC 2025 : Govt School Pass %
  • HSLC 2025 : Aided School Pass %
  • HSLC 2025 : Private School Pass %
  • People's Convention on 3rd May #2 : Gallery
  • Featured Front Page Photo 2025 #2: Gallery
  • Riya Khwairakpam : HSE Science Topper
  • Keisham Hannah : HSE Arts Topper
  • Warepam Lidia : HSE Commerce Topper
  • HSE 2025 Result : Science Full Result
  • HSE 2025 Result : Arts Full Result
  • HSE 2025 Result : Commerce Full Result
  • HSE 2025 Information / Abbreviation
  • HSE 2025 Topper : Science
  • HSE 2025 Topper : Arts
  • HSE 2025 Topper : Commerce
  • HSE 2025 : Pass Percentage
  • HSE 2025 : Result Abstract
  • HSE 2025 : Candidates with Highest Marks
  • Ougri Lirol :: Part 1 : Ooba Video
  • President's Rule in Manipur : 1967 - 2025
  • Downloadable Manipuri Calendar :: 2025
  • SPONSORED ADS