A Budget sans a roadmap for growth

The first Budget of the second NDA government is lacking vision and is regressive and does not have any reformative or bold steps to boost the economy from the economic slow down. The time had demanded the government to wake up from its inaction on the economic front. In this regard the government has failed in all aspects.

Firstly, there was a huge expectation from all sectors of the economy, of bold steps by the government to strengthen sectors such as agriculture, health and education. Despite giving huge promises to farmers, there is no vision for uplifting the agriculturalsector which is in a deep crisis due to natural calamities and indebtedness.

Contrary to the sector’s demands, there are no measures for supporting the disadvantaged farmers including the creation of sustainable farming sector and measures like extending moratorium for debt ridden farmers in the country. Across the country, the agricultural sector is in a deep crisis and even the traditional farmers are giving up farming as a profession. There are no measures to lift the farming sector from its shackles in the current Budget. The manifesto of BJP for the Lok Sabha election had promised to spend ₹25 lakh crore for the development of the rural sector. The Budget does not mention how it is going to achieve it.

More shockingly, even the pet project of Prime Minister in the health sector, Ayushman Bharath has not been mentioned in the Budget. As the allocation for health sector across the globe substantially increases, it is quite disappointing to see the lack of serious policy initiative and allocation in the health sector.

Even the Economic Survey 2018-19 spoke about the grim reality of economic slowdown. Unemployment is at a 45-year high at 6.1 per cent in the country. According to the Centre for Monitoring Indian Economy (CMIE) India’s unemployment rate had touched 8.1 per cent as of June 25, 2019, softening marginally to 7.8 per cent later. The Budget doesn’t have any steps to tackle the issue of joblessness in the country. There is no road map to deal with the massive unemployment problem, except the usual token phrases like ‘Make in India’ and ‘Start-up India’.

Instead of pushing more opportunities in the organised and unorganised sectors the government is talking about job creation in utopian sectors like artificial intelligence.

Capital issues

One of the fundamental issues the country is facing is the lack of capital inflow in the domestic market. There was a huge expectation to boost the banking sector for lending money for capital formation and consumption. However, despite having a thumping political majority, the government failed to take any revolutionary measures. The announced ₹70,000 crore for public sector banks is insufficient to meet this purpose. From this meagre amount, it is supposed that, around 50 per cent will be diverted to other statutory expenses rather than ensuring capital inflow and accelerating consumption in the economy.

It has to be noted that, public sector banks reported a collective loss of ₹30,940 crore in the fourth quarter in the current financial year. Instead of strengthening the banks, the government was busy destroying the institutional independence of the Reserve Bank of India.

The high pitch claims to make India a $5-trillion economy, is left with no clear road map. The real picture of economy gives an opposite picture. GDP growth slowed down rapidly in 2018-19. In the four quarters, it was 8.0, 7.0, 6.6 and 5.8 per cent. It will probably decline further in April-June 2019. The automobile sector has recorded a 10-month consecutive de-growth in June 2019. This is not expected to improve in the near future. The services sector contracted for the first time in more than a year in June 2019. The composite index of factory and services showed a decline for the first time in 13 months indicating much pain in store for the economy in the coming months.

Without having any clear road map for sector wise growth and more capital formation how this is going to to be achieved remains a mystery.

Controlling research

In the educational sector, there is no clear vision to take primary and higher education forward. The proposed National Research Foundation seems to be a further attempt by the government to monitor the research in higher educational institutions rather than boosting independent research.

The Budget is silent on another pet project of the Prime Minister — ‘Smart-Cities’. As the cities across the country face serious issues of water crisis and pollution, there is no clear road map from the government to tackle them.

It is clear from the Finance Minister’s Budget speech that the government is hell bent on giving away the public sector in the country. The strategic disinvestment of public sector is the only way found for revenue generation. In fact, new public sector projects fell by 41 per cent which is the lowest in 14 years.

More shockingly the decision to increase the excise duty on petroleum products will raise the burden of common people. The rising petroleum products’ prices, including cooking gas have been a serious burden for the poor citizen in the country. A government which is boasting about taking the Gandhian principle of ‘Antyodaya’, imposing more burden on the common citizens in the country is paradoxical.

In short, the Budget has failed to give any boost to the economy in terms of increasing capital formation, encouraging consumption, creating more jobs and fundamentally transforming the economy. The Budget has attempted to hoodwink the general public by referring to farmers, and youth, but without providing concrete measures or policy initiatives to resolve the basic issues faced by them.

The Budget announcements are simply lacking in vision and a clear road map to implement them. The Finance Minister has failed to provide a blue print for new India which is already in a low ebb of economic growth and development. The smoke-screen created out of unrealistic and twisted declarations will not heal the real economic stagnation in the country.

The writer is General Secretary of the Indian National Congress.

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