Why are you not encouraging my saving habit? - A public health perspective

I have'nt studied much economics, but some of the recent moves by the Government has left me worried and apprehensive for the future generation.

1. The first is the move to tax returns from various provident funds such as EPF. The Government later backed off, though it left a clear message as to the intentions of the Government. It also showed what a Government is capable of achieving with a single decision. The initial budget speech by the Finance Minister was not specific about the extent and coverage of the said proposal. Subsequently there were different clarifications issued by the Finance Minister as well as other Government sources. Some said that only interest earned will be taxable while others said that PPF will be exempt as though it is a generosity. In the wake of protests the provisions were apparently removed from the budget proposal.
2. The second is the decision to slash the interest rates of small scale savings schemes. This move may be perceived as a part of the economic policy pursued currently or as a retaliatory response to the 'forced' withdrawal of EPF taxation proposal. There is the added caveat of review of the interest rates every 3 months.

Several newspapers have commented on these policy decisions. Some have lauded the Government for taking bold steps in the pursuit of their own economic agenda but warned about the Government's ability to give a political answer raised by the workers and middle class families. Others have mocked at the Government policy of bringing economic growth by breaking open the common man's piggy banks. While the policy makers and intellectuals debate about the pros and cons, I am worried as a common man due to the following reasons.

• Should we not have a plan for the future and make adequate savings for me and my family? If I am discouraged to save and encouraged to spend more for my current needs how will I meet my future needs as a member of this society? I need a house, need proper education for my children and may have to address the medical needs of my family. Of course there are banks offering housing & education loans and insurance companies queuing at my doorstep offering mediclaim policies. But dont they come at a cost? I end up paying much more than I borrowed by way of interests and penalties after enduring the constant feeling of financial insecurity and threat of notices from lenders. Why can't I be encouraged to save and do what I want? What is the assurance I will get a loan whenever I want? Will the Government provide the security? Not everybody can afford to be a business baron who can borrow millions from the public coffers after getting false credit ratings and still end up living in luxury villas in exotic locations without paying the money back.
• The already minimal bank interest rates are supposed to help the lending banks. Who are benefited by slashing the interest rates of post office small savings schemes and provident funds? Why I do get the feeling that the Government is reluctant to pay reasonable interest rates to the working middle class people even as there is bubbling enthusiasm to give tax sops to the so-called business community?
• A large number of small savings accounts are maintained by housewives and children. They might thave been influenced by the significant presence of lady promoters and also the need to save something for the future. Such savings schemes have granted at least some autonomy for the women in our society entrenched with caste and gender discrimination. The decision to slash the interest rates will no doubt affect their confidence. Even the must touted Sukanya Samridhi scheme intended to secure the future of girl children has not been spared.
• The medical expenditure incurred by an individual has been growing up owing to
  • rising pharmaceutical prices
  • advent of costly investigations
  • Hospitals being perceived as profit making institutions rather than as care-giving institutions which leads to the patient becoming a commodity at the hands of doctors constrained by hospital management tactics
  • Unscrupulous deals made by some doctors with pharmaceutical companies and diagnostic centres
  • Rising morbidity burden owing to lack of preventive measures and lifestyle changes
• While we hear more and more stories about families being pushed into poverty due to catastrophic health expenditure, medical insurance is the projected as the answer to this. Even as insurance is being promoted in a big way other measures with much less investment and more long standing impacts are being neglected. Even though medical insurance is needed, sole dependance on insurance with its inherent defects such as moral hazard is dangerous. In any case it ultimately results in transfer of public money to insurance companies and hospitals. Why is the Government shying away from its responsibilities of health promotion, disease prevention and health care delivery, helping insurance companies and hospitals make profit while reluctant to provide decent interest rates for the hard earned savings of the common man?. This is not the way of increasing public expenditure in the health sector.

Until India is in a position to provide basic amenities such as clean water, good housing, good sanitation, adequate nutrition for its millions, do away with the effects of caste and gender discrimination and provide adequate social security for the aged and homeless along with universal health care, it will be difficult to defend the current measures in the long run with political or objective evidence.