Unpopular UPA presents equally unpopular budget
THE Congress has milked the ‘Aam Admi’ for the last eight-nine years even as it had extended its hand towards him. “Congress Ka Haath, Aam Admi ke Saath” has been the slogan the party had encashed enough.
If the Budget unveiled by Finance Minister P Chidambaram is any indication, the country’s ‘grand old party’ seems to be telling the common-man, “Congress ka Haath, Itna hi Saath”. - -the way , it has neglected him or rather pushed him almost to the wall in the last four years. The height seems to be that even in the run-up to the 2014 elections, the principal party of the UPA does not care for the middle class and those at the bottom of the national pyramid.
Any political party, worth its grassroot leaders, has a basic understanding that if not “populist”, it can at least unveil measures which appear to be somewhat “populist”. After all, the political parties are supposed to remain popular among its voters and what is wrong if the populist policies are followed as long as you do not take the country into a financial mess. Why blame the Congress? Does it have grassroots leaders?
The biggest disappointment from Chidambaram has come about for the salaried class, which was hoping against hope that at least some relief was round the corner, given the kind of back-breaking inflation that it has had to battle with day in and day out. There was an expectation that the personal income tax exemption limit would be enhanced, at least in the election year.
But the Finance Minister did not even bother about any ‘tokenism’. He rather adopted a ‘care two hoots’ attitude betraying arrogance of a combination which has ruled for almost nine years in a row. His argument is that if he tinkers with any limit, lakhs of the income tax payees would be outside the net.
And so much for the poor man as the FM has made a special provision of Rs 10,000 crore for the Food Security Bill. But then, overall food subsidy has been substantially cut. Now, where does the poor man with hunger in the belly stand?
The corporate sector which had over-rated Chidambaram as the Finance Minister was given a worse kind of a deal. Out of the additional resource generation of Rs 18,000 crore , about Rs 15,000 crore is to come from surcharge on the corporation tax at a time when the corporates are finding it difficult to sustain their competitiveness in the middle of falling industrial expansion.
No wonder, immediately after the Budget speech the Bombay Stock Exchange plunged even though some of business chambers, under some kind of pressure, were giving sound bytes about the Budget being “growth-oriented and investment-oriented “and what not.
He made an announcement about allowing 15 per cent investment allowance to give a boost to the manufacturing sector. But the facility has been reserved for the big buys because it is available only if new investment in plant and machinery would exceed Rs 100 crore. The micro, small and medium enterprises (MSMEs), the lifeline of the Indian economy have been left high and dry.
It is being projected as if Chidambaram has achieved a magical feat by containing the fiscal deficit to almost the budget (revised) target of 5.3 per cent of the Gross Domestic Product (GDP) for the current financial year and 4.8 per cent for the fiscal 2013-14. His ‘ mool mantra’ was very simple – let ‘s not spend, the deficit would come into check. The worst was that let-us-not-spend- principle was followed in the case of the Plan expenditure with the full support of Prime Minister Manmohan Singh even though his favourite and Planning Commission Deputy Chairman Montek Singh Ahluwalia cried it foul. It is a matter of common knowledge how Prime Minister’s blue-eyed boy was sidelined on this count, as the pressure of India facing the junk grade rating by the like of Standard and Poor’s and the Moody’s looked real because of the fiscal irresponsibility being displayed in the last three years.
The Plan expenditure was slashed by almost Rs one lakh crore during the current fiscal from Rs 5.21 lakh crore in the Budget estimates to Rs 4.29 lakh crore . The worse was that the plan expenditure on capital account, the real asset building category, was less than Rs one lakh crore at just about Rs 85,814 crore. This is less than a business turnover of even a single private sector company, say Reliance Industries.
But the Finance Minister is claiming that he has provided about 30 per cent increase in the Plan expenditure for the next year. But then, 30 per cent increase is on the Revised Estimates . If you compare with the BE of 2012-13, the expenditure under this head for the next year is hardly anything to write about.
It is alright to see fiscal deficit in relation to the country’s GDP and the sub-five per cent figure does not look alarming. But look at this: About one-third of the government expenditure of over Rs 16 lakh crore would be met by borrowings – and near about 40 per cent tax revenue would go to meet the interest burden.
Are we not leaving this country under huge debt for which the coming generations will not excuse us. But then, jugglery gives you this magical number and you claim fiscal prudence with the help of some cheer leaders from the industry, who have not even looked at the sheer data screaming at the dangers ahead.
The next government at the Centre will begin its tenure with a debt burden . Advice for political parties: Do not make too many promises in the next elections. Would find it extremely difficult to fulfil.