Madhya Pradesh: Union budget 2015-16, a case of missed opportunity?
In light of huge political mandate and the noises made by the government in the run up to the "first full year budget," there were great expectations from this Budget.bhopal Updated: Mar 01, 2015 18:10 IST
Footfalls echo in the memory, down the passage we did not take… Towards the door we never opened, into the rose garden. (T.S. Eliot, Four Quartets)
In every nation’s history, there are times which have the potential of being watershed moments. In light of huge political mandate and the noises made by the government in the run up to the "first full year budget," there were great expectations from this Budget.
More so since in the first nine months, despite a lot of sloganeering, not much was evident in terms of 'achhe din' on the ground.
One was hoping that in the backdrop of a reasonable fiscal headroom - thanks in part to fall in crude subsidy bill and savings envisaged due to better targeting of subsidies and bonanza envisaged on telecom spectrum auction as well as disinvestment proceeds - we would see a big bang push towards reviving the animal spirits of the economy. However, it did not happen.
My biggest grouse is that whatever proposals for mobilisation of resources for infrastructure spends like Tax Free Infra Bonds, additional outlay of Rs. 70,000 crore and setting up of Infra Fund, etc., are too little and perhaps too late.
Given the state of infra projects in the country where all the PPP projects are in a limbo and finding no takers and those already under execution facing financial challenges, the need of the hour was not merely an incremental push but a more substantive out of the box approach.
On the consumption side, unless the tax payer saves entirely as per FM’s wishes there are no major sops.
In fact, with the increase in service tax, there has been less disposable income in the hands of the common man.
Despite a commitment for housing for all by 2022, no incentives have been announced to kick start the housing demand, which would have led to buoyant demand from steel, cement and electrical sectors as well as huge employment generating potential.
Notwithstanding the above some of the good measures announced include, GST implementation deadline set at April 1, 2016, which would reduce any uncertainty and ambiguity on this matter.
Secondly, gold bond scheme would lead to savings being channelised into productive areas and also save precious Forex.
Another good move is extension of visa-on-arrival facility that would lead to more inbound tourism.
Then, more devolution of funds to states is a good measure but the only catch is that the states’ fiscal discipline is still suspect.
So, end-use monitoring of these funds is important as they should not be frittered away in populist measures.
Overall, the budget is good on intent but implementation and execution remain biggest risks.
We do hope that all this intent is translated into action and leads to a long awaited and much promised virtuous cycle.
(The author is managing director of Mimani Wires Pvt Ltd and former chairman of CII, Madhya Pradesh chapter)