It is the last full Budget of this Government, and I should add ‘thank god for that’. Let me recall the economic context in which this Budget has been presented. I draw my facts from the Economic Survey presented on January 29.

There are two macro-economic situation vulnerabilities — fiscal account and current account. The real effective exchange rate (REER) has appreciated about 21 per cent since 2014, affecting India’s export competitiveness, but the domestic political economy, meaning the BJP, favours a stronger, less-competitive exchange rate.

In the last four years, the level of real agricultural GDP and real agricultural revenues have remained constant. Jobs is the number one issue. Jobs are not being created. Industry — namely the MSMEs — create jobs. Industrial GVA growth has declined from 9.8 per cent in 2015-16, to 6.8 per cent in 2016-17, to 2.7 per cent in 2017-18. In the same period, manufacturing GVA has declined from 12.7 per cent to 7.9 per cent to 3.1 per cent.

The last number on investment (GFCF) was 28.91 per cent of GDP in the second quarter of 2017-18. The last number on CPI inflation was 5.21 per cent in December 2017. The last numbers on credit growth are — non-food credit 10 per cent and credit to ‘Industry’ 2.1 per cent. In the light of the above, the Budget proposals should have been bold and radical, and backed by adequate provision of funds. Unfortunately, they are a big let-down.

The big disappointments

The first is fiscal deficit. All deficits have crossed the Budget estimates. Against a BE fiscal deficit target for 2017-18 of 3.2, the fiscal number will be 3.5. Even that is questionable. Similarly, for 2018-19, against a target of 3.0, the FM has pegged it at 3.2. The second disappointment is with regard to exports... I did not hear any measures to boost exports.

The third disappointment is on agriculture. There is a promise to increase MSP 1.5 times, but there are no details. The Swaminathan Committee has been remembered in the last year of the Government’s tenure! Besides, ₹2000 crore for e-markets and ₹500 crore for Operation Green (whenever the Cabinet will approve the scheme) amount to a pittance. There is nothing to indicate that farmers’ real income will rise

The fourth disappointment is on healthcare. The promise of ₹5 lakh per family for secondary and tertiary healthcare is a big jumla. The target group is 10 crore families... The money has not even been provided for a premium, presuming that it is an insurance scheme.

Assuming that each family will avail of ₹50,000, the amount required per year will be ₹5 lakh crore! If the insurance companies will foot the bill, the premium at ₹5,000-15,000 per family will require an outgo of ₹50,000-1,50,000 crore per year. Is the FM serious?

The fifth disappointment is with regard to jobs. The FM has fallen back on the tried-and-failed Mudra scheme. More Mudra loans will mean more tokenism, but no additional jobs.

The sixth disappointment is about investment and credit... nothing to boost private investment... to encourage banks to lend and investors to borrow, for new investment.

The seventh disappointment is about tax relief. There is none for the average taxpayer. Only corporates with income up to ₹250 crore get a tax relief of 5 per cent.

Finally, the most disappointing part is the cut in the outlays on major schemes — MNREGA, PMAY, Swachh Bharat Mission, et al. This is a defeatist Budget. They have clearly run out of ideas.

The writer is former Finance Minister. The comments were made at the AICC

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