The present policy needs some of the long term measures instead of short term measures so as to look after future needs:
- Infrastructure: There is urgent need of more investments for infrastructure projects which can generate employment opportunities as well as enhanced needs of usages of future.
- Lending: more and more funds should be allocated for manufacturing sector, agriculture, infrastructure, processing, value added services. Advances for spending should be discouraged and savings should be encouraged.
- Borrowing: Govt. should restrict its borrowings to meet the requirements of infrastructure, investments, education, and human resource development only. Borrowings should not be used for regular administrative expenditure, incentives, subsidies, interest, pension like unproductive expenditure.
- Allocation: The available funds has to be distributed among various sections, areas, for allocation. More funds needs to be allocated for manufacturing, income generating, wealth creation, long range infrastrure needs, education only.
- Foreign investments: Amounts received from foreign investors towards investments has to be towards capital account only and not for current account. During the period from Jan 2010 to March 2010 the foreign direct investments in share market were Rs. 26,000 corers. The same should have been for industry instead of share market.
- Basis for lending: At present there is no proportionate standard norms for allocation of funds to various sectors. Hence, there should be availability of funds to various sectors of manufacturing, agriculture, trading, infrastructure, services etc. At present the lending norms are more specific about security rather than income earning capacity of the loan advanced. Now the emphasis should be shifted towards income earning capacity of the borrower which will give more assistance available for vocations, professionals, service providers, value addition where very low capital is required. Necessity of funds should the important criteria than the availability of funds with the banks. Lending should be for earning income rather than for spending. More importance be given for imparting education, infrastructure, investments in industries, manufacturing sectors, agriculture sectors, value addition process, and for more productivity, wealth should be created with the help of lending or value addition should be there. Also lending should not cause reason for hoarding of stocks thereby creating artificial shortages. Lending for housing can be streamlined by restricting the quantum of loan amount, and quaint of housing units for each individual family. Also the vehicle loans can be restricted by lending only for earning income like taxi vehicles, or commercial usage vehicles so that the spending on fuel, unnecessary personal usage can be reduced. There by reducing the dependence on fuel imports and savings in the hands of individuals.
- Disciplinary: The role as regulatory authority should be more active than the past when more and more independence is given which should be in correlation with social responsibility of the commercial organizations.
- Investments: In addition to the financial institutions, the individuals also has to be encouraged to invest in long-term investments for infrastructure, capital industries. The investments flown to capital market may not be treated as investments available for industry since, both are different areas of operation though one is dependent on the other. Industrial performance should reflect on the capital market and which should not be other way round.
- Inflation: higher the inflation, higher the price which leads to further inflation spread to many sector thereby multiplying the effect. Reasonable increase in inflation is inevitable in growing economy.
- Deficit financing: every time the budgets are showing deficits of revenue, fiscal etc. Which is against the long term interests of the economy. There should not deficit financing at all. Revenue expenditure should not be met from borrowed funds.
Social responsibility: it is the responsibility of every regulatory authority to strengthen the economy by creation new wealth, manufacture, value addition but not by increase in value without addition of wealth, product, and service.
