While presenting the budget, Finance Minister Nirmala Sitharaman set onerous targets, most of them with a deadline of election year 2024. Will the government deliver before its next mandate?
Nirmala Sitharaman
Union budgets never please all. Finance Minister Nirmala Sitharaman's first comprehensive budget isn't an exception, though it talks of making the impossible possible before the BJP government goes to the next Lok Sabha polls in 2024, with Prime Minister Narendra Modi as the harbinger of hope for a country of aspirations. The budget tries to engage individuals working in organised and unorganised manner, and various sectors that contribute to the country's economic growth, but also raises many questions.
India's growth is arrested, say experts, even as the government thinks otherwise. The widening gap between revenue income and expenditure is known and documented. The fiscal deficit isn't expected to recover any faster. The worrisome drop in revenue receipts due to the GST regime, the debts and expenditure that don't reflect in the budget, are expected to be recovered through disinvestment of government institutes. But considering the history of disinvestment bids, experts don't expect the government to make up for the losses anytime soon.
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This means that the government will not have sufficient money to spend on budgetary allocations. The previous years have shown a drop in expenditure than the projected figures. So, if the massive demands made in this year's budget are not met fully by the fiscal end, the finance minister's dream of improving the Indian economy would fall flat. The outcome is as important as the input in one's growth story.
Making India a $5 trillion economy is a dream that we all want to realise not just any coming year but within the next four years. UPA-II had planned for a $5 trillion economy eight years ago. The BJP government has taken it forward with its own vision, which experts in the Congress and Opposition parties challenge.
"The take-away from the budget speech and the budget numbers is that the BJP has given up on reviving the economy or accelerating the growth rate or promoting private investment or increasing efficiency or creating jobs or winning a greater share of world trade. So, brace for an economy that will limp along at an unsatisfactory growth rate in 2020-21," wrote former finance minister P Chidambaram for a national daily on Sunday.
The BJP cannot deny that the Modi government's economic policies have been in the news for the wrong reasons. Be it demonetisation, GST implementation, unsupervised thrust on digital transactions and inordinate delay in having a policy in place for farming sector (which the FM has corrected by giving a 16-point programme for doubling agro output in next two years).
Proving political pundits, bad press and widespread distress stories wrong, the people returned BJP for another term in the Centre last summer. Nine months after a grand victory, Sitharaman's 2020-21 budget should make us believe that the BJP has realised the need to focus on areas where it would certainly lose votes, notwithstanding its pet nationalistic and Hindutva agenda.
One such area of focus is farming. The 16-point programme seems sufficient but vague. It aims at doubling agro produce in merely two years, giving rise to questions on whether it is possible when the sector has been struggling for long, and will yield only when given long-term sustainable solutions.
We fail to understand if cash crops like rice, wheat and sugarcane, which we produce more than required, should come under the new scheme. The extra yield has created a big financial problem for the state-run market agencies that buy the additional wheat and rice at higher prices because it cannot reject the government mandate. The agencies would soon go bankrupt if the yield is not regulated. The warehousing agency is also put under tremendous stress because the extra yield rots on the premises and leaves no space for other produce.
On the other hand, we fall short of producing pulses and oilseeds. So, the farmers need encouragement to change crop patterns that can fit the overall food requirement and reduce imports. Sitharaman has said that more warehouses would be built, dedicated rail and air cargo service provided for reaching the perishable commodity markets.
The finance minister has also appealed to the states to implement laws that ensure the farm sector's welfare. It would be interesting to see how non-BJP states that are at loggerheads with the Centre respond to her appeal by suitably amending the existing acts against their political thinking.
The BJP said the budget is all about the village, poor and farmers. Rural poverty will reduce and farm suicides will stop if the farm sector creates more jobs. The villages will improve if their economy grows like never before. But water resource is still an issue for the farmers.
Maharashtra, where availability and management of water is skewed in favour of certain regions, registers one of the highest farmer suicides in the country, and sadly, no government has been able to arrest the unfortunate incidents that destroy generations.
The Budget encourages organic farming while the farmers prefer hugely subsidised chemical fertilisers. Farmers will reject inorganic fertilisers, insecticides and pesticides only when they can afford organic nutrition, which needs to be produced on a larger scale to bring their pricing down. There are individual farmers and farmers' groups who have taken up organic farming after realising better returns. Their network needs to be expanded by fighting the chemical agro products lobby and the corrupt state mechanism that eats into subsidies.
The worried farmers are mulling what would come their way. The salaried class stopped rejoicing when the optional income tax regime was decoded. Infrastructure, education, social welfare, women and child welfare, railways, etc, have been promised handsome allocations. We will have to see where that money comes from.
Dharmendra Jore is political editor, mid-day. He tweets @dharmendrajore
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