Union Budget: Nothing to crow about
The Union Budget presented in Parliament on Tuesday is noted mainly for its emphasis on high government spending to boost growth and create more job opportunities — with less reliance on private enterprise which is not yielding the desired investments. The mantra for the Centre as also for states with a liberalization of rules is to borrow and spend for assets-creation. Other than this, the budget proposals are of a general nature and did not seem to visibly inspire even the assembled members in Parliament. Clearly, the Finance Minister’s speech was uninspiring and failed to catch the fancy of the nation about any leap forward. Among the positives, the fiscal deficit has been brought down by 0.5 per cent of the GDP to 6.4 per cent.
While there is a repetitive drone while delivering budget speeches about reserving “lakhs of crores” for agriculture, infrastructure, MSMEs, housing etc, and these formed the centre-piece of the budget speech, the fact remains that any budget is principally about earmarking funds. In the case of the “tranches” announced during the pandemic period, the gains from these for the national economy and the people at large are worth a watch. The PM Development Initiative for North East which will essentially cater to infrastructure development has been earmarked Rs 1500 crore. This is too small a sum for a region with huge developmental backlog. While income tax rules remain more or less unchanged – to the relief of the salaried middle class – the ever-increasing GST collection has become the alternative means to fill the government coffers and this comes mostly from 80 per cent of India’s poor and middle class. This is an indirect way of boosting government revenues. Incidentally, those who pay through their nose are both unmindful and unconcerned. The claim of the FM that the government did not want to earn a “single paisa” more by way of income tax during the pandemic is simply hogwash.
The budget speech this time was shortened by half, over 9,000 words against the 17,000 words when she presented the last budget in an atmosphere of Covid-induced gloom. The change of the chief economic adviser, a key figure with the finance department, a week before the presentation of the budget had raised eyebrows. When the nation is slowly recovering from a long lull in growth, it’s time to stand steady, recreate and race ahead. A growth projection of 8 to 8.5 per cent or an estimated 4.8 per cent rise in government expenditure, or a promise about digital currency or 5G rollout alone will not suffice. This run-of-the-mill budget inspires none.