Asserting that the economy is on right track, Union Finance Minister Arun Jaitley presented his third budget which pleased both farmers and investors
On the eve of presentation of Central Budget 2016-17, Prime Minister Narendra Modi, in his ‘Mann Ki Baat’ radio talk, told high school students that he too had to face a public examination next day like them. Modiji hastened to add that he was however confident to do well in the examination. When Finance Minister Arun Jaitley concluded his hundred and eleven minute long budget speech in the Parliament on February 29, the confidence expressed by the Prime Minister was proved right. The economics of Team Modi’s third budget is too transparent and simple to necessitate too much of a diagnosis or analysis. That the Finance Minister had walked the talk in the budget, silenced the NDA regimes’ critics. Little wonder therefore that the Opposition members who rose in protest when he was invited by the Speaker to present the budget, sat in apt silence throughout his presentation as he was rolling out his proposals one after another. As the International Monetary Fund (IMF) and the World Economic Forum lauded (WEF), Economy of Bharat has been shining like a bright spot amidst the dark clouds of global economic slowdown. That the world’s fastest growing economy would continue to surge ahead in the days to come is further ensured by the Narendra Modi government’s nine pillar macro-economic strategy.
What is reinforced by the Budget sticking to the fiscal deficit target, despite global and domestic headwinds, is the country’s economic stability and financial credibility, Bharat is indeed shining, with a 7.6 per cent growth while the rest of the world including China is lagging behind. Fiscal deficit is pegged at the targeted 3.5 per cent of Gross Domestic Product (GDP). The Finance Minister commits to bring it further down to 3 per cent by the next financial year. Implying that the quality of fiscal consolidation is on the right path, also the revenue deficit at 2.5 per cent has undershot the targeted 2.8 per cent. At the same time, there is no compromise whatsoever on capital spending either. A robust business environment coupled with a strong social security framework is ensured. In keeping with the Prime Minister’s vision, the Finance Minister has performed a balancing act between economic realities on the one hand and the country’s development demands and social compulsions on the other. Jaitley’s third budget is precisely no-nonsense, least populist and therefore realistic.
As the Economic Times rightly headlined its budget day issue “Farmer is India’s DiCaprio”, no doubt. True to Modiji’s vision, Jaitely’s mission is to empower the farmer economically and socially. The attempt, as announced, is to double the farmer’s income within the next five years. The budget proposals are framed with this end in view. Mahatma Gandhi’s oft-quoted but always forgotten words that “Bharat lives in villages” seem to have profoundly influenced the philosophy of Budget 2016-17. It lay down the road map and action plan to strengthen rural economy in letter and spirit. With a view to enhancing the irrigated area by three million hectares now and then by the end of the fifth year by another eight million hectares, comprehensive schemes are being initiated with immediate effect. The rural thrust of the budget is further reinforced by ambitious total electrification and road development programmes. Crop loss is being provided full insurance cover. Never in the recent past, our budgets have had such a massive rural-agrarian thrust. Obviously, there is a definite paradigm shift this time, a shift towards the farmer and the rural sector, a shift indeed for the better.
The third budget of a government is the most crucial, argue experts in budgeting, for it often spells out the economic ideology and fiscal programme of any government. By that yardstick, the Budget 2016-17 proclaims in unambiguous terms that the Modi regime is never pro-rich. Not only the upper class, but also the upper middle class is not pampered in any way by the Finance Minister. On the contrary, they will now have to pay more for goods and services to facilitate a five star life style. Again, for those who are much well off, earning Rs 1 crore or more per year, the surcharge on income tax has been hiked by an additional three per cent. However for those with black money, Jaitley has offered one more chance, perhaps the last chance, to come clean by paying 45 per cent of their concealed income as tax. Also significant is the cut in travel expenses of Ministers. The budget proposes a hefty 54 per cent slash in the travel and tour expenses of Union Ministers.
That “growth need not necessarily mean development” is underlined by Budget 2016-17. This is explained by its thrust to social sector and by the series of welfare measures announced. More over the broad objective of the budget itself is empowerment of the villagers, economically and socially. Health care and education take the front seat this time. It is apparently to curb our youth from going abroad for higher education that a chain of centres of excellence ensuring quality education has been proposed. Last but the least, to be lauded are proposals like cooking gas to every below poverty line family and the facilities for dialysis at all general hospitals.
The Opposition’s reaction to the Budget was very much on expected lines. Even as there was all round praise for Jaitley, the Congress found little in the budget. While former Prime Minister Manmohan Singh complained that it “lacked big ideas”, the former Finance Minister’s reaction was there was “nothing new” in the budget. But all these are meant only for public consumption to conceal their embarrassment. Deep in their hearts, the Congress leaders, right from top to bottom, feel that Arun Jaitley has stolen the thunder, economically and also politically. And, they do admit it in private or off the record.
Hari S Kartha (The writer is Senior Executive Editor, Amrita TV)