Budget Review

Dear FM, were the Economic Survey and the Budget prepared by 2 different teams and/or approved by different leaders? How come a Survey points to a most favourable environment (oil prices down, inflation down, growth picking up) while a Budget seems to feel constrained – and therefore lacks any special thrust or innovation? It does not even begin where it should – from last year’s outlays and the status of their spend and outcomes. It’s remarkable how the private sector has been ‘excused’ from investment, due to stressed balance sheets! Who then will Make in India, FM & Modiji? It’s good that you did not pamper private sector with excise freebies, but it needs to be pressured to invest from its huge reserves (built on more than a decade of earlier achhe din). PPP, last year’s panacea, has suddenly become a bad word, and has just been dropped - almost a thousand PPPs are probably languishing. A big miss was in incentivising households to move out of gold and property investments and into the ‘productive’ financial market – in order to build a most important savings base.  

It also seems that the Delhi electoral defeat is starting to colour all Modiji and BJP decisions. What else explains the messed-up intervention in Bihar, the desperation to somehow cobble together a ‘coalition’ in J&K and the decision not to touch MNREGA and the like? The latter put paid to a major opportunity to merge various govt. schemes, to ensure more productive outcomes and in the process also significantly prune the total outlay. And whatever happened to Smart Cities - have they already been smartly eased out? Most ridiculously the Budget became more a 5-year Plan document of various intents. The most important and urgent Infrastructure Bond was presented as work in progress. It seems that the BJP still thinks it is presenting an Interim Budget! Even Disinvestment, which could be the bailout for the BJP for ‘revenue’ (given that States will now get more of the revenue share), is not getting the focus it deserves. The current year target has not been met. FMji, there will never be a perfect moment for disinvestment – please be happy with 80% outcomes. Your next year’s performance is almost dependent on Disinvestment, given the phenomenal target that you have taken (or been forced to take) for it. BJP’s jitteriness has given the opposition a perfect handle, and the Land Acquisition Bill has been the first casualty. Surely Modiji should be made of sterner stuff. He needs to pull himself up – for there is no other who can then do that to the Party.

The 5-year Plan part of the Budget talks of removing exemptions and exceptions, while the Annual part introduces ad hoc surcharges and swachh levies (to the extent that Corporate Tax, which is to reduce by 5% in 5 years, starts with an increase this year)!

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