Make no mistake, it’s PM Modi’s budget
While Nirmala Sitharaman may read out the Budget speech, there is little doubt that it will once again be Narendra Modi’s budget
Not bad for fiction, was the cryptic comment some years ago of a business journalist from a western country to the Union Budget. The jibe was treated as a joke by a group of Indian bureaucrats to whom the barb was aimed. Everyone had a good laugh.
But is the Union Budget and the exercise that goes to prepare it, with the ceremonial ‘Halwa’ making and people involved in the exercise locked up in the office thereafter to keep details a secret, truly a joke on the people?
It can safely be said that the exercise remains an enigma to most Indians, who may not care much for the breathless TV coverage, the jargon spouted by economists and the pontification by pundits.
Even the educated middle class is unlikely to know much about the size of the budget, the revenue collected by the government or how the government spends the taxpayers’ money. The budget does little to enlighten even nationalists! Not many of us either know or care for the revenue that the Government of India collects from the South and spends in the North and the East.
How much of difference does the Union Budget make to the people living in the countryside? A lot because they are the voters who governments would like to woo. Houses for the poor, wages or guaranteed work, subsidy for transport, support price for agriculture produce, industry in rural areas, a new train etc. do make a difference to their lives. And they are happy with what comes their way.
But do they understand the budgeting process? Do they understand how much is being spent on toilets and how much on statues? Do they really know that it is their money, and not just the income tax payers’, that are used to pay public servants and pay for propaganda?
Have people grasped that with the introduction of the GST (Goods & Services Tax), the state governments have largely forfeited their right to collect taxes, ceding it to the Centre. They may not be aware how funds are devolved to the states, the formula that the government follows in distributing revenue to the states. Or what might happen if an overbearing central government fails to pay the states their due or discriminates between states?
Besides the general ignorance about public finance, there are other reasons for not taking the Union Budget seriously. While India took the initiative in the 1950s to build a ‘statistical’ infrastructure and calendar to furnish policy framers credible data, the Modi government has systematically dismantled and discredited the data generated by the government’s own agencies. So much so that figures bandied around by the government have become suspect. Even GDP figures are said to have been dressed up.
Union Finance Minister Nirmala Sitharaman, perceived widely as a pawn or a prisoner in the hands of the Prime Minister and the PMO, has contributed to the suspension of disbelief. Last year she undid much of her own Budget proposals by withdrawing them one after another, within weeks of having announced them. What is the guarantee she will not do it again?
What’s more, she not only slashed the government’s projected revenue by reducing Corporate Tax, announcing more funds for the stressed banking sector and real estate etc., in a desperate attempt to shore up confidence and investment sentiment, the finance ministry announced an extraordinarily astronomical investment plan for the infrastructure sector, four times the size of the projected annual Budget ! Talk of building castles in the air.
Which is why it is a ‘Make or Break’ budget for the government. The first task before her is to restore the credibility of the Budget and take the country into confidence about the economy. A crisis is also an opportunity and the FM can unveil the kind of structural reforms that the government has been talking of but fell short of implementing.
She also needs to do a lot more for agriculture and the rural areas. It is perhaps time for an innovative, even if partial, universal basic income of the kind that the Congress proposed through NYAY in its manifesto before the General Election of 2019. Ego should not come in the way of accepting a sensible suggestion.
This country belongs to everyone and the government should not just accept suggestions from its own echo system.
While Nirmala Sitharaman may read out the Budget speech, there is little doubt that it will once again be Narendra Modi’s budget. It is not just accident that the PM addressed the nation last year after presentation of the Budget by Sitharaman. He is likely to repeat the exercise this year.
So, let us stop blaming the FM for the economy and give credit where it is due.