Achhe Announcements Or LIP Work?
Prime Minister Narendra Modi and Finance Minister Arun Jaitley’s inaugural Budget for the country was not only an important test of resolve, but also a critical Budget for the nation’s economic scenario. Narendra Modi is wearing a crown of thorns, an inheritance bequeathed to him by the UPA government under whose government inflation had skyrocketed, the fiscal deficit worsened, and regressive policies all but driven away foreign investment. The government also needed to meet the expectations that started building up in May once it was clear that the Bharatiya Janata Party (BJP) would form the next government with a clear majority. The expectations of the aam aadmi were very high from the Modi government, but the Union Budget 2014-15 presented by Finance Minister Arun Jaitley, was more of a mixed bag. Although the Budget addressed most key issues affecting the economy, there was a lack of detailed information addressing how various schemes and reforms would be implemented.
Jaitley’s debut Budget speech was very much in resemblance of what P Chidambaram handed over to him, barring some numerical changes. When Prime Minister Narendra Modi said earlier that people would have to brace for tough measures, it was widely seen as a signal of a major shift in fiscal management and debunk of populism that plagued the UPA budgets. The pragmatic approach taken in the railway budget, plus the hiking of rail fares ahead of that also raised hopes that the Budget would bring an end to the please-all approach of the previous government.
Jaitley asked: “Should we allow this drift to carry on and watch helplessly? Should we allow our future to suffer because of our indecisiveness? Should we be victims of mere populism or wasteful expenditure?” And it seemed that these hopes would be fulfilled. But the whole speech never gave an iota of assurance that this would be the approach of the government. A major overhaul at expenditure reform and emphasis on a more open economy were the two major expectations that the market had from this Budget, but it seemed Jaitley did not get the feelers from the market.
A major overhaul of the subsidy programmes was needed. But merely reiterating that the government proposes to overhaul the subsidy regime, including food and petroleum subsidies, and make it more targeted while providing full protection to the marginalized, poor and SCs/STs doesn’t make any sense. From the last NDA’s government to till date, every finance minister has given only lip work to this idea and not taken any concrete step in this regard.
By Nilabh Krishna
The Budget That India
WAS WAITING FOR
A budget can be described in many ways. It can be a balancing act, as many would say. It can be a fudging of figures, or trick of a magician, as the former finance minister P. Chidambaram explains in his book A View From Outside. It can be described as “not bold enough” or “meek” as the capitalist lobby in the country was complaining after Arun Jaitley’s speech. But to me the budget presented by Arun Jaitley for the year 2014-15 is one that has touched the heart of India.
It is for the first time in India that a budget exercise has been made to involve every Indian in an endeavour for growth and a better life. The budget articulated the urgency to overcome the drag of history, the curse of six decades of unfulfilled promises. The budget has not made any false suggestions. India needed a budget that told us the truth about the economy. The real numbers, not the fudged ones that the Congress used present.
Jaitley too, like the Railway Minister Sadanand Gowda, did not attempt to play to the gallery. The budget took notice of the political mandate, the aspirations of different traditional support base, the angst of the neo-middle class. Any attempt to get swayed by the pink press and stock market priorities would have been disastrous. So the main street gave a thumbs up and cheered. It was a difficult choice.
The new budget has clearly laid down a road map for a progressive, egalitarian 21st century India growing at a speed unfathomed in the last five years. It has the assurance of financial consolidation and discipline, it has the strength of a new confident India rearing to grow, it has caught the imagination of young India because of its promise of increased job opportunities and world class living conditions.
The lobbyists said the budget is not bold enough, because it did not announce earthshaking reforms like abolition of subsidies and sell off of public undertakings. The Congress cheer leaders mocked it saying it as a rehash of Chidambaram’s interim budget with a saffron splash. Then why are the Congressmen protesting? Only because of the saffron taint? The Communists were saying that it will be a budget of the corporate for the corporate. All subsidies are going to go, they screamed. And even after the clear pro-poor slant of the budget they say it is anti-poor. It is only a matter of time before the subsidies are scrapped, they lament. The point is they believe, the BJP cannot do anything right. After all they are the perpetual outsiders. The diversity of these arguments reflect the fact that the innovation of the budget has stumped them. They ask but where is the plan for fighting inflation? As if it is not economics but war strategy. Where are the details? Ask other critics. And what about the jobs that Modi promised? They ask in such indignation as if there is a separate means of job creation other than economic activity. Understandable. Because they can think of only NAREGA, 100 days of unproductive jobs in a year of 365 days. As Arun Jaitley once famously said, they have “elevated poverty” instead of poverty alleviation.
To understand the Arun Jaitley budget one has to read it along with the speeches of Prime Minister Narendra Modi and the Railway budget. There is a total philosophy for nation building in the budget, which is a marked departure from past budget exercises. Perhaps that is why Jaitley did not try to expose the fudging done by Chidambaram in the interim budget while fixing the 4.1 per cent deficit by over estimating the revenue and underestimating expenditure. It is really a waste to talk about the Congress whom people have consigned to the dust bin. The truth about Chidambaram’s deficit projection is that already 46 per cent of it is covered in three months with nine more months to go for the financial year.
The UPA left an economy growing at 4 per cent with a 12 plus inflation, 13 per cent lending rate, double digit food price rise, unemployment growing at over 10 per cent, stock market decline, booming black money which is estimated as equivalent of 71 per cent of the GDP and a stagnant economy. Investors were wary of coming to India with proposals worth Rs 20 lakh crore stuck in government files. Bureaucrats did not take decisions because of the weak PMO which will not protect them.
Narendra Modi changed all that and brought buoyancy and verve in the system. The budget is an offshoot of that elan and vitality. While it took care of growth it also ensured that every section of the society particularly the weak are protected. The budget is a masterly exercise in keeping the Modi vote bank happy while reaching out to new segments, The special focus on North-east and Jammu and Kashmir is a big initiative in integrating India. The stress on clean cities, world class facilities and pilgrimage tourism will boost the tourism sector while creating jobs and earning precious foreign exchange.
The infrastructure spending, 100 new cities and special industrial chains will unleash the animal spirit in the economy. The special attention to farmers which was missing all these years will kick start the rural economy. The dynamo of the economic growth engine is in the execution of projects and in this the practicality and pragmatism of the budget is a great reassuring ingredient. Here is the Modi touch of saying only that is feasible. The budget has taken care to keep a mention of all the big dreams that catapulted the BJP to such stunning success. It is without doubt the best budget I have seen. Its good bye to Nehruvian lethargy, a prelude to the dawn of new India. A world power.
By R Balashankar
THIS BUDGET: SANJEEVANI FOR THE LAST MAN
The Prime Minister, Narendra Modi termed the Budget as a budget that converts hopes and aspirations of the people into trust. The Prime Minister expressed confidence that the Budget will take India to newer heights of progress and stated: “This Budget is a new ray of hope for the poor and downtrodden sections of society.”
Congratulating the Union Finance Minister Arun Jaitley for his maiden budget, the Prime Minister said, “The Budget will give an impetus to jan bhagidari (people’s participation) and jan shakti (people’s power).” He described the Budget as an effort to make India skilled and digital, guided by the usage of the latest technology.
He said that for the moribund economy, this budget has come as a sanjeevani (new life) and an arunoday (sunrise) for the last man in the line. The Prime Minister said development should be all-encompassing (samaveshak, sarvadeshak, sarvasparshi) and should also reach those parts of the country which have so far remained under-developed.
Modi assured the people of India that the government is leaving no stone unturned in doing their duty to develop India and rid the nation from the challenges it faces. He recalled how the entire world had immense expectations from India but how in the last decade the entire economic system crumbled due to which not only India but also the world lost hope and there was an atmosphere of pessimism.
Talking about the new government’s efforts, the PM said, “Since we formed the government there were discussions about whether this government can free the nation from crisis but the Railway Budget and today’s General Budget show that we are moving in the right direction.”
The PM categorically stated that despite the testing times, his government is committed to extend every possible help to the poor, the neo-middle class and the middle class, inspired by the mantra of ‘sabka saath, sabka vikas.’
Modi talked about the innovative provisions in the Budget for the development of tribal communities and schemes for giving an impetus to skill development for youth. “The Budget is in line with the Government’s vision to create a skilled and digital India,” Modi said.
He elaborately talked about the measures for the farmers such as Krishi Sinchai Yojana that would benefit farmers and achieve the guiding principle of ‘per drop, more crop.’ He particularly mentioned the provisions in the Budget for the cleaning of the Ganga.
The PM pointed that the Budget will give a ray of hope to the housewife who is being burdened by rising prices and will place utmost importance to women empowerment and girl’s education.
He reaffirmed the government’s commitment to make India self-reliant in the defence sector. The Prime Minister said his government was committed and confident of bringing India out of crisis. And this confidence was due to the capabilities and strength of 125 crore Indians. He said this strength would be channeled towards taking the country to new heights. (Uday India Bureau)
ROADMAP FOR NEW VIBRANT INDIA
The Union Budget 2014-15 presented by the Finance Minister Arun Jaitley has successfully captured the imagination of the people by addressing their hopes and aspirations. It has defined a roadmap for ‘New Vibrant India’.
Exhibiting an appetite for change the Union Budget provides an enabling framework to realise the true potential of Indian economy. In a clear move to achieve fiscal consolidation and economic recovery the Union Budget has made many concrete announcements. Schemes like ‘Skill India’ announced in the Budget will boost the confidence of India’s youth and create massive job opportunities in the country.
‘Pradhan Mantri Gram Sinchai Yojana’ designed to provide irrigation facilities in rain-fed areas will not only benefit the farmers but also strengthen our food security. The Budget has allocated Rs 500 crores for displaced Kashmiri migrants which will help in expediting the process of relief and rehabilitation in J&K.
By outlaying Rs 3000 crores for police modernisation the Budget has highlighted our government’s resolve to strengthen the existing police infrastructure in the country. The Budget has also proposed to hike the income tax exemption limit from existing Rs 2 lakhs to Rs 2.5 lakhs which will provide much needed relief to salaried class. By proposing six new ‘Textile Clusters’ the Union Budget gives boost to Indian textile industries and also create job opportunities. The Budget has also allocated funds to Ganga rejuvenation and river interlinking project which is indeed a welcome step. The Budget carries good news for almost every sections of the society be it farmers, youth, businessmen, industrialists, worker, women, SC-STs or even the people with disabilities. (Uday India Bureau)
JAITLEY FUNDS IMPORTANT UPA PROJECTS
Finance Minister Arun Jaitley, in his maiden Budget speech, has funded key welfare schemes of the UPA regime like MGNREGA and National Food Security Act. Allocating more funds to such schemes has shown party’s intention to provide right for job and right to food to the people of the country. The NDA government allocated Rs 34,000 crore for MNREGA as against Rs 33,000 crore allocation by previous government.
Jaitley stressed that the emphasis will be laid on “more productive, asset creating” works under the scheme. “The government is committed to providing wage and self-employment opportunities in rural areas. However, wage employment would be provided under MGNREGA through works that are more productive, asset creating and linked to agriculture and allied activities,” he said.
The food guarantee scheme, National Food Security Act, which is set to be launched across the country this fiscal, has also got a hike in allocation. Jaitley has given Rs 59,000 crore for the food guarantee programme which is much higher than Rs 10,000 crore fund allocated by the Manmohan Singh government. The total food subsidy bill earmarked this year, in fact, is pegged at Rs 1,15,000 crore as against Rs 90,000 crore last fiscal. (Uday India Bureau)
FISCAL CORRECTION PATH AFFIRMED
“The fiscal correction path has been affirmed and the FD target of 3 per cent in 2016-17 will be maintained. The recalcitrant States (Gujarat and Madhya Pradesh) have fallen in line and GST will be introduced. The BJP has found its ‘appetite’ for reform (that was suddenly lost in 2013-14) and the FDI cap in insurance will be raised to 49 per cent. Discarding Mr Yashwant Sinha’s views, the Government will maintain its majority holding in public sector banks even while raising new capital for the banks.
“MGNREGA, the National Livelihood Mission, BRGF, RIDF, RMSA, Industrial Corridors, more AIIMSs, IITs and IIMs, One Rank One Pension, minimum pension of Rs 1000 under EP Scheme, and a host of other programmes launched by the UPA governments will be continued. I find several new announcements are simply a re-statement of ongoing programmes. ‘Skill India’ is a new name for the National Skill Development Mission. Proposals approved for funding under Nirbhaya Fund have been announced again.
“Manufacturing, which is the main pillar of the Industry sector, was not mentioned except in the context of FDI and the taxation proposals. There was no policy statement on the manufacturing sector. There was no reference to the Food Security Act. These are grave omissions. The minorities got short shrift, only 61 words BJP sought a mandate for Congress Mukt Bharath. My friend, Arun Jaitley, would have realised that it is not possible to have even a Congress Mukt Budget. This is the NDA government’s and Mr Jaitley’s first Budget. Whatever its shortcomings, it is appropriate to wish them well.” (Uday India Bureau)