By Dhurjati Mukherjee
The interim Budget presented by stand-in Finance Minister Piyush Goel putting thrust on rural industrialisation possibly fulfils the dream of Mahatma Gandhi in the year of his 150th centenary celebrations. The focus on the farm sector has obviously been kept in view of the large-scale farm distress that has been plaguing the country, opening opportunities in rural areas and appeasing its vote bank.
Though the Pradhan Mantri Kisan Samman Nidhi’, announced assures income support for small and marginal farmers, they have been somewhat disappointed at the amount offered as also there has been no announcement on loan waivers in the Budget proposals. There is no denying that it is beginning, expected to benefit 12 crore farmers with the money going directly to their bank accounts, but the scheme would possibly exclude the most vulnerable sections of the farming community namely, tenants and landless labourers which, in 2011, were estimated to be 14.43 crores.
One can expect that the amount may possibly be increased in the coming years. Even this meagre amount, Rs 6000 to be paid to farmers would entail an expenditure of a massive Rs 75,000 crore, which Piyush Goel pointed has no match with Rs 52,000 loan waiver granted in 2008. One cannot justify the criticism by a section of experts regarding the uptrend in prices of inputs as this is just a support price and cannot overcome distress per se.
The announcement of assured mega pension plan of Rs 3000 per month for unorganised workers with Rs 15,000 income is also a significant step as over the years the government paid little attention to this sector. While organised sector employees have been well protected, those in the unorganized side have been at the receiving end. This may appear to be a ‘repackaged version’ of the Atal Pension Scheme, but it is expected to go a long way in giving new life to around 10 lakh unorganised sector workers.
The allocation of Rs 60,000 crore for the flagship scheme, MGNREGA, increased by Rs 5000 crore, compared to the current fiscal has been higher but it would be difficult to finance programme for the full year. At a time when unemployment has reached a record high of 6.1 per cent, at least an additional sum of Rs 5000 to 8000 crore should have been allocated to ensure employment to the rural poor for the whole year. This year also the allocation fell short by a large number and this may be repeated by the end of the next fiscal.
Expectedly, it is a populist budget with an eye on the impending General election. There has been little justification in not only doubling the zero tax limit, but ensures the middle class does not have to pay any tax for those having income of Rs 6.5 lakhs, if one invested in saving instruments. The loss in this regard would be difficult to make up. At least this section should have been imposed an education and health cess.
Similarly, increasing the defence budget to an all-time high of Rs 3.05 lakh crore may not be quite rational, keeping in view the valuable resources required for infrastructure demands of the country. Though it is agreed that defence needs of the country cannot be ignored, still spending such a huge sum of our valuable resources may be difficult to justify. Obviously, the cross-border terrorism that Pakistan continues may have forced the political leaders to go for such a massive allocation. However, it is expected a part of the money would be used in indigenous production of arms, fighter planes and ships, which may lead to economic growth.
Regarding digitalisation of one lakh villages as contemplated it may help their overall growth. Moreover, the benefits of artificial intelligence and advanced technologies are to be explored for which a national programme has been rightly envisaged. Other measures for revival of the rural sector like setting up a separate ministry for fisheries, two per cent subvention for farmers pursuing husbandry and fisheries or hit be natural calamities, and three per cent interest subvention for farmers who repay loans in time, is encouraging.
Keeping in view, the 10-point vision pan, there has been a quantum leap in transport infrastructure, specially highways and railways. Goel predicted next generation infrastructure of roads, railways, seaports, urban transport etc. While allocation for highways increased to around Rs 83,000 crore, Railways went up by 21 per cent to Rs 66,768.67 crore. Construction and doubling of new lines, gauge construction signalling and telecom are the major areas of expenditure.
Regrettably, there is hardly anything significant for the health sector which needed special focus to bring down communicable and non-communicable diseases, both of which have been growing at a fast pace. Though the allocation for the scheme that covers hospitalisation of the poor – PM –JAY launched last year – has more than doubled, there has been lack of increase in primary and preventive health care programmes. There is no announcement for extending help to the States say for setting up hospitals in sub-divisions or adding another district hospital in every district or in at least the highly-populated 100 districts of the country.
It has been reiterated that the Government stands for the poor and the middle class which, in fact, is a reality considering the present Budget. But more than the poor, the lower and middle income sections of society have benefitted from the proposals and the Government has tried to shed its pro-business image.
However, in highlighting the Modi government’s achievements, Goel cleverly did not say anything about job creation, but insisted that the concept of employment had changed to make ‘job seekers’ ‘job creators’. He claimed the government’s self employment schemes, including MUDRA, Start-up India and Stand-up India, were working well, though official data contests this claim.
Resource generation for the huge expenditure contemplated has been debated by a section of experts who feel that it would be extremely impossible to execute the plans announced. The fiscal deficit projected at 3.4 per cent may be an understatement, according to many an economist and financial analysts. Innovative off-budget borrowings and strategies to roll over expenditure if added to the fiscal math could queer the picture. Already the outgo of interest payments has gone up to Rs 5.88 lakh crore in 2018-19 from 5.29 lakh crore in 2017-18 and is expected to further increase to Rs 6.65 lakh crore.
Meeting the disinvestment target of Rs 80,000 crore of the current year and Rs 90,000 crore in 20189-20 are rather impossible targets. So far, the government received Rs 35,533 crore from disinvestment proceeds and with two months left, realising another Rs 44,467 crore may remain an impossible task. The same scenario may prevail in the next fiscal.
Finally, the Government has to ensure that welfare plans are not affected due to paucity of funds as it had happened in this fiscal in the case of MGNREGA programme, which, as is well known, provides employment to the poorer sections for a part of the year. Thus resource generation has to be a crucial area needing attention of the government or the next one which comes to power. —INFA