‘Jaitley’s Budget may focus on delivery’

This time few are trying to second guess Finance Minister Arun Jaitley as he prepares to present the last full Budget of the present government on February 1.

Economists, sector experts as well as consultants all want to know whether Jaitley will remain true to himself and continue with the task of economic reforms he had set for himself when he presented his maiden Budget or will he adopt a populist approach with general elections next year?

Some believe that tone of the Budget has already been set by Prime Minister Narendra Modi, who at the beginning of the Budget session on January 29, said, “Our objective should be to reach out to the Dalits, oppressed, underprivileged and to those who did not have any access to these benefits. We also need to see how the villagers, poor, farmers and labourers are benefited maximum from the Budget.”

In his Maiden Budget 2014-15 speech, Jaitley had said that he was duty bound to usher in a policy regime that will result in higher growth, lower inflation, sustained level of external sector balance and a prudent policy stance.

“The Budget may not be as predictable as some are assuming,” said a person associated with the developments adding that “it will be a Budget that will deliver”.

Since 2014 several decisions have been taken – the Goods and Services Tax rollout, Insolvency and Bankruptcy Code, demonetisation, DBT of LPG, rural electrification, Jan Dhan Yojana, and digitisation to name a few.

A significant chunk of these decisions have been taken in last two years and the results will be seen only later this year or next year.

However, those within the BJP remain confident that “It may not be very populist. There may not be much experiment. The Budget could touch on the issues such as agrarian distress, more jobs for the formal sector and promoting self employment, comment on Centre-State relationship.”

Sources said there may be a mention of health and education sector, electric vehicles, solar power and climate change.

While they agree that the Finance Minister may be constrained to do much on the tax front, particularly corporate tax, but the personal tax front could see some tinkering. There could also be something for banks and investments.

Oil worries

Oil price volatility has also put the government in a spot.

“We cannot take oil prices for surety,” said an official. Indications are that the Budget may take an average of $65-$68 a barrel to be on the safe side. The price on which Indian refiners source their crude oil stood at $66.86 a barrel on January 30 lower than the price of January 29 which was at $67.86 a barrel.

As the Railway and Union Budgets have been merged, Jaitley will also have to touch upon the demands of this sector. The Budget could look at incentives, modernisation, unlocking of resources and safety issues.

In his first Budget, he had laid down the broad policy contours of the NDA government.

“In this Budget his aim would be to show that this is a government that delivers. It will focus on completing the existing schemes, expanding the base of some of the popular or successful programmes,” said an official.

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