When it comes to this budget, there is a huge gap between what is being claimed and the sorry reality
From rural roads to toilets, the government has resorted to statistical jugglery to hide its underachievementsUpdated: Jul 05, 2019 22:42 IST
In the past one-and-a-half years, three different finance ministers have presented three different budgets. There is, however, a commonality — all of them have been uninspiring and unremarkable.
Breaking from convention, the finance minister Nirmala Sitharaman, in her budget speech, did not mention allocations for most projects. The focus was on grand announcements rather than specifics.
The government aims to make India a $5 trillion economy by 2024. However, the budget provides no road map towards the goal. The Economic Survey called for private investments to drive growth. But fresh investments have plunged to a 15-year low. There has been an 80% fall in investment in private and public sector projects.
In a cruel joke, instead of some of the hundred lakh crore infrastructure investment promised in the Bharatiya Janata Party manifesto, all we got was an expert committee.
On the jobs front, the government officially accepted, after the election, that India is facing record high unemployment. In response, this budget offers to skill our youth to make them employable. Given that this government has been unskilled at skilling, its ambitious announcements are hollow.
Exports have been plunging, yet the government did not lay out a concrete vision to promote exports. The list goes on. There is not a sector for which the government has a credible plan of action. In most places, it only has slogans and announcements.
This practice must concern us all. The Monthly Economic Report of the Reserve Bank of India had in May highlighted how we have entered a low-growth trajectory. Tepid growth combined with high unemployment, suboptimal investments, and depressed agricultural incomes makes for a dangerous cocktail.
The world recognises the impending dangers of environmental degradation. This government, however, slashed the budget for environment, forestry, and wildlife. The finance minister spoke of the ‘Ease of Living’. There is no ‘ease of living’ when our infants develop asthma due to air pollution.
A deficient monsoon looms — so rural social protection nets need to be strengthened. Instead, the allocation for MGNREGA, a bulwark against income shocks, has been slashed compared to revised estimates for the financial year (FY) 2018-19 (from Rs 61,084 crore to Rs 60,000 crore). This is puzzling given MGNREGA reportedly will be key to implementing the government’s Jal Shakti mission, and the budget’s promise to provide water to every home. The government has also not strengthened the currently inadequate PM-Kisan scheme.
Where is the money? For FY 2018-19, the government’s actual receipts from Goods and Services Tax were Rs 1 lakh crore (13.5%) lower than projected receipts. Unsurprisingly, the government’s receipts for FY 2019-20 have been revised down to Rs 6,63,343 crore from the projected Rs 7,43,900 crore for FY 2018-19.
A 25% upward revision in disinvestment target (to Rs 1,05,000 crore) does not sound very convincing either. Getting the Life Insurance Corporation of India or the Oil and Natural Gas Corporation to purchase other Public Sector Units (PSUs) hardly counts.
The budget is hopeful that public-private partnerships will come to its rescue. For railways, the finance minister said: “Railway infrastructure would need an investment of 50 lakh crore between 2018-2030”. That is more than Rs 4 lakh crore per year. The FM also said that the Railways’ capex outlays are Rs 1.5-1.6 lakh crore. Unfortunately, for the railways, the PPP contribution during 2018-19 is estimated at Rs 27,000 crore and that for FY 2017-18 was Rs 22,116 crore. There is a yawning gap that needs to be filled.
The already burdened common consumer has been hit by another hike in petrol and diesel prices. This when, for instance, petrol prices in Delhi have risen from Rs 56 to Rs 70 between March 2016 and July 2019. The government raised prices when international prices rose and pocketed windfalls when international prices fell by levying excise duties and other cesses. Given tensions West Asia, worryingly, another spike in international prices cannot be ruled out.
The budget has little for human capital growth. While the government wants to get more institutions in the World University Rankings, it has slashed the budget for Higher Education Financing Agency by more than 20%. Health also barely finds a passing mention in the budget speech.
The budget has numerous announcements that merely expand current programmes — for example, rural roads and toilets. But the Narendra Modi government has a poor record in achieving even the objectives of its flagship programmes. It resorts to statistical jugglery to hide its underachievements.
The past year has witnessed a historic slump in agricultural prices. The budget offers nothing new to the farmers. There is no road map as to how the agricultural prices can be augmented. Landless labour, tenant farmers, and sharecroppers have nothing to gain from this budget.
Finally, the minister claimed the fiscal deficit was 3.3%. Reports tell us that fiscal deficit had crossed 4.5% mark by the February-end. When it comes to this government, and this budget, there is a huge gap between what is claimed and the sorry reality.
Rajeev Gowda is chairman of the research department, Congress, and a Member of Parliament, Rajya Sabha
The views expressed are personal