Open Forum
New
Delhi, 11 July 2019
Towards New India
BUDGET OF HOPE
By Dr.S.Saraswathi
(Former Director,
ICSSR, New Delhi)
“The Budget will play
a great role in building a New “India” , assured the Prime Minister after
its presentation in Parliament. He looks
forward to making the nation samrudh (prosperous)
and the people samarth ( empowered), fulfilling
commitments made for 75th Independence day in 2022. Labelling it a
“Green Budget”, Modi described it as citizen-friendly, development-friendly and future-oriented exercise
which will empower the poor, provide
better future for the youth and make
citizens prosperous.
He is confident that
with collective efforts of the nation, it is possible to grow as $5 trillion
economy in the next 5 years. Asserting the
target could be achieved if every family, tehsil
and district move in the right direction. Critics who questioned this were
dubbed “peshevar nirashawadi” (professional pessimists)
Importantly, the Budget
is the instrument with which a Government
can implement its policies and programmes for development, welfare and national
security. Essentially, a document stating the Government’s income and expenditure
proposal it has grown in importance and actually become a policy document.
In the context of the just concluded bitter electoral contest, this year’s Budget has extraordinary
importance and will surely undergo
strict threadbare scrutiny not only by Parties but also by people from different economic classes and social
groups. Great expectations were raised during elections and greater will be the extent of criticism
of the Budget which has to match aims
and aspirations presented before the voters.
Few are inclined to look at the overall impact
of the Budget while most critics focus on some specific
aspects of special importance to them. An exercise like this has to address the
needs and interests of all citizens and country directly and indirectly, openly
and by implications and produce immediate and long-term effects.
The proof of the
Budget is in its inclusiveness.
the first Budget of the second Modi Government
has come out with substantial measures to usher in the Prime Minister’s “vision,
passion and imagination” of a “New India”. Recall, the BJP Working
Committee adopted a resolution in September 2018 to build a “New India” by 2022
which would be “free of terrorism, casteism, communalism and (where) nobody will be homeless”.
The professed aim of
the Budget is to fulfil people’s aspirations in this term 2019-24 as their basic needs had been the focus in the first term 2014-19. This will be implemented through
incremental measures building over the
steps taken earlier. As Arun Jaitley
described, it expands the road map on which the Prime Minister
built India’s growth story from 2014-19.
The proposals on the whole are
for continuation of 2014-19 policy for holistic development.
Highlighting the central feature of the Budget, Modi stated the “poor will be strengthened and youth will
get a better tomorrow. The middle class
will progress and development will expedite even more. Tax structure will be
simplified and infrastructure will modernize”.
How these are to be achieved will
prove the fiscal efficacy of the Government
and its sincerity to redeem its pledges.
The Government has
set an ambitious goal of achieving a sustained real GDP growth of 8% so as to take the nation towards a
$5trillion economy by 2025. It hopes to
reach 7% growth in the current financial year. This itself is a big challenge before the nation facing
severe drought in most States and consequent drop in agricultural and allied
activities. The key driver for economic growth is “investments”.
Top priority is given
to infrastructure by allocations to build national highways, rural roads, faster trains, modern railway stations, expanded
ports and develop aviation and inland
waterways. Infrastructure gets priority as “growth engine” and advanced
technology as its strategy.
Underscoring, larger
investments and big firms are not job killers as propagated by some Parties, the Government’s Chief
Economic Adviser cited China’s model of China where capital goods
production, research and development and
supply chains also generate jobs. Small firms
are much larger in number than
big firms in India, but they do not create as many jobs as the big firms and
their productivity is also small.
However, in the
Indian economy, small enterprises have their own significance in promoting
self-employment and family occupations that are still thriving. To make them
vibrant participants in building the economy, several loan schemes and
assistance including easy procedures for
starting and expanding enterprises are proposed.
Special attention is
given to encourage growth of start-up
industries. Only the identity of the investor and the source of income have to
be provided. Funds raised by start- ups
would not require any kind of scrutiny by Income Tax Department. Micro, Small,
Medium Enterprises (MSMEs) will benefit from exemption of tax as well as scrutiny for investments up to
25 crores.
Lack of knowledge of
economic matters and failure to look beyond our immediate surrounding are big
handicaps of not just common people, Parties but also many leaders who do not want to come out of it for
political reasons. Worse still, they
come forward to lead protest movements
against infrastructure projects while supporting at the same time, loan waiver schemes that may encourage beneficiaries to
borrow further and make them indebted
forever.
Agrarian distress is
addressed with schemes to promote farming and not by writing off loans. Income-support scheme --- PM Kisan Yojana ---
for small and marginal farmers was
announced in the interim Budget before elections. In accordance with the overall thrust on
infrastructure, agriculture
infrastructure will be promoted with dairy cooperatives and fisheries. Farmer
welfare schemes like crop insurance, market intervention, price support , PM-Aasha procurement will receive emphasis. Rural housing will get priority.
The role of Non-Banking Finance Companies (NBFC) in the
country’s economic growth is recognized and the sound ones among them
will continue to receive funding from banks and mutual funds as they are
considered important in capital formation in small and medium sector.
Social welfare
continues to receive importance. This is reflected in facilities to self-help groups and increase in allocations to SC, ST and
women. Housing and home building loans are furthered.
Higher tax on
super-rich is likely to familiarize the nation with the concept of
social responsibility of the well-to-do, accepted everywhere. But, whether it will reduce the burden on the
middle class is doubtful unless price rise is controlled.
Throughout election
campaigns, all Opposition Parties harped on the Government’s failure to create jobs, a criticism repeated against the Budget. Undeniably, jobs
cannot be created like any material object but only facilities, favourable
conditions, infrastructure and incentives can be provided which will generate work
and occupations. Self-employment
opportunities are growing and are preferred by job seekers in many fields. It
cannot be ignored in the hunt after fixed salary, allowances and perks.
On the whole, the
Budget conforms to the social-economic ideals of the Party in power. By voting for the BJP, the nation has
accepted its income-expenditure proposals.
(Copyright, India
News & Feature Alliance)
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