The ‘Bahi Khata’ (traditional Indian ledger), instead of the ‘budget’ briefcase, carried by the Minister of Finance Nirmala Sitharaman while entering the Parliament to present India’s Budget 2019-20 did mark a symbolic change. However, the Bahi Khata tabled in Parliament did not reflect any change in the mindset of the government. The dreaminess of the budget, wildness of some of the provisions, and gorgeous phrases have remained the same as in the last five years of the Modi Government.
It was a surprise to hear Sitharaman say that they had shown by their deeds that the principles ‘perform, reform, transform’; could indeed succeed. We ‘have set the ball rolling for a ‘New India’, she said. It would not be out of place to mention here that New India is supposed to emerge by 2022, only three years from now, while we are caught in not only tepid growth, joblessness, and farm distress, but also in the rising trade and current account deficit and crude oil prices along with intensifying trade war. One wonders how it could be achieved with the type of budget that has been presented this year.
Harping on the motto ‘Majboot desh ke majboot nagrik’ (Strong citizen of a strong nation) she said that average amount spent on food security per year doubled during 2014-19 compared to the preceding five years while taking a dig at the UPA government known for pioneering the Food Security Act that provisioned food for all. Our Finance Minister thus seemed to give all credit to her own government discrediting the works done by earlier governments.
She said further that it took India 55 years to become $1 trillion economy and after that in five years we added another $1 trillion. $5 trillion economy size is quite doable in next few years. She claimed that the common man was served even as major transformational reforms were brought about. The Indian economy will grow to become a $3 trillion economy in the current year itself. It is now the sixth largest in the world. Five years ago it was at the 11th position. Government has given a massive push to all forms of physical and other connectivity.
However, contradicting herself she said that they wish to propose many initiatives to kick-start growth. Does the phrase ‘kick-start’ not reflect the present status of being ‘standing still’?
Economic growth in reality has slid down in recent months, which needs to be reversed and pushed forward to achieve at least constant growth rate of 8 per cent if India is to be made $5 trillion economy within five years. The initiatives taken in the budget lacks such a great push. Our Finance Minister says that India’s economy is worth $2.7 trillion which will become $3 trillion this year. If it is the expected rate of growth in a year, one wonders how it will reach $5 trillion in next five years? The budget provisions do not support this dreaminess.
Finance Minister talked about kick-starting the ‘virtuous cycle’ of growth indirectly admitting that the country is under the ‘vicious cycle’ right now. This in itself contradicts the great painted economic narrative of the Modi government. She proposes number of economic reforms. She says that time has come to start aircraft financing but has not sufficient provision to save our ailing aviation sector. It is worth mentioning that all earlier efforts have failed. She applauds India Inc as our job creators, and also nation’s wealth creators and has promised them ‘together, we can prosper’.
The government will ensure that the National Highway grid is developed with an ‘apt financial model’. The time will tell if her apt financial model is costlier for common people or not. Water and road transport is also to be improved to pit the rural-urban divide, she says. Her Bahi Khata aims to effect such provisions that are likely to encourage profiteering. She says, ‘We don’t look down upon legitimate profit earning. Gone are the days of policy paralysis and license quota control regime…Together [India Inc and the government] with mutual trust we can gain, catalyse past and attain sustained growth. It reveals the mindset of the government which may ‘legitimize’ that level of profiteering which may go against socialism and communalism putting the common non-trading people at disadvantage.
MSME loan up to Rs 1 crore with 2% interest subvention for all GST-registered MSMEs was announced. But it cannot breathe life into the MSMEs that are well neigh dead. Even other provisions for this sector are insufficient. However, proposal of setting up social-stock exchange to list social enterprises and voluntary organisation under SEBI, has instilled new hope of getting access to public money. How the money from public and banks are accessed and mishandled is already known to people. New area has been opened for with eroding safety and security of public money. The budget lacks security provisions to make people comfortable about their hard earned money from stealth overt and covert activities.
Hundred per cent FDI was permitted for insurance intermediaries. Credit Guarantee Enhancement Corporation will be set up in 2019-20, action plan to deepen markets for long-term bonds with a specific focus on infra sector to be put in place. Sebi has been asked to mull minimum public shareholding to 35% from 25%.
Electricity and clean cooking facility is to be provided to all by 2022, except those who will be unwilling to avail them. She said that Gaon, Garib, and Kisan (village, poor, and farmers) are at the centre of government programmes but at the same time she announced that local sourcing norms will be eased for single-brand retail sector. Gram Sadak Yojna Phase 3 has been envisaged to upgrade 1.25 thousand kilometer. Under PMAY-Gramin, only 1.95 crore houses are to be provided in the next three years. It means that the housing for all by 2022 will be difficult to achieve.
The government intends to invest widely in agriculture infrastructure. It is good, but there is not sufficient provision to double the farmers income by 2022. The government has been able to produce 14 volumes of document to explain how it could be possible, but in reality the average income of our farmers remained almost the same in the last five years and majority of them are under great distress. New education and health policies are announced, but they are going to be even costlier beyond the reach of the common people.
The budget, in brief, will give proportionately higher benefits to the rich business and industries, and the common man and working class are to be benefited a little. People should rise from dreaminess and be ready to face the hard realities that may need to confront in near future.