National debt vs natural debt
India has recorded high rates of growth in recent years, which while creating new opportunities for society in this country also pose some major challenges and threats that the Budget can address in a significant way.
We are quite obviously pursuing a path of development that is identical to that established in the countries of the West. This will no doubt contribute to human welfare to some extent but one major negative impact of growth and development would be on the quality and condition of our natural resources.
This is obvious in several areas. While deforestation appears to have been arrested, in several parts of the country the density of forests remains low.
Our river systems have been polluted to an extent that no life can exist in several of them. There is a progressive loss of biodiversity and danger of several species becoming extinct, of which the dwindling tiger population of the country is a tragic emblem. The consumption of natural resources has reached levels, which are clearly unsustainable.
The Budget has primary responsibility in creating a framework by which India starts taking urgent steps towards a sustainable pattern of development. Some of the measures to be put in place include taxation over inefficient use of energy, be it in cars, refrigerators or air conditioners, and lower taxes on those which use energy efficiently.
Also, incentives need to be provided and, perhaps, financing mechanisms put in place - for instance, for a shift towards efficient use of energy such as replacement of incandescent lamps with Compact Fluorescent Lamps (CFLs). Stronger incentives are also required for the development and use of renewable energy technologies.
With growing concerns on the security of energy supply, the Budget needs to focus on the objective of higher energy security, which would require the restructuring of major energy consuming sectors while at the same time diversifying sources of supply.
Paramount today is the need for rapid expansion of public transport, both inter-city and intra-city. The Budget can provide much larger allocation of resources and incentives for promoting public transport. Similarly, buildings being constructed today symbolized by huge shopping malls would lock us into a pattern of energy consumption that will only increase our overall dependence on energy imports.
Regulations would be required to ensure higher energy efficiency in new buildings, and perhaps much greater allocation of funds for training and dissemination of knowledge on energy efficient architecture and building design. Overall, we must remember that the degradation of natural resources affects the poorest people in society most adversely.
Hence, the adverse trends in the quality of these resources in recent decades clearly exacerbate the problems of the poor. The country has to place as much emphasis on our natural debt as it does on national debt. Perhaps, the 2008 Budget could make a major beginning in acknowledging this reality.