A case of trying too hard?

Every class has one student who claims to study a lot and goes for a lot of tuitions but, surprisingly, always ends up failing the exam, despite an easy question paper. For the last three budgets, Arun Jaitley seems to resemble that student.

In 2014, the NDA government found itself at the receiving end of an oil bonanza that could have served as the base upon which it could initiate a host of promised big bang reforms. Three budgets later, the visionary and big bold ideas promised by Narendra Modi have not materialised. Worse, they have not been envisioned either!

However, Finance Minister Arun Jaitley’s defence of this problem is simple and straightforward. Good governance is the reason for some sectors of the economy doing well and for the vast majority of the sectors that are on a downward spiral; ‘legacy factors’ are to be blamed.

Notwithstanding this, what are the takeaways from this budget? The big positive takeaway is the important realisation that has dawned upon the Modi sarkar: catering to the suit-boot economy takes India nowhere. And in what should be seen as a welcome move, agriculture and the rural economy that were grossly ignored in the last two budgets, have received some much-needed funding impetus. However, let’s not forget that Jaitley has promised to double farm income by 2022. This will entail growing at a rate of 12 to 14 per cent every year till 2022.

We are nowhere close to achieving these targets. He had better have a solid explanation to justify his 2022 grand plan. The government has also made the same old claim of doing away with the Agriculture Price Market Committee. In the 2014 budget, we were told great strides would be made on this front but no action has been seen on the ground.

Self-congratulation on CPI and WPI numbers seems highly unfair to the poor and middle-class when the prices of essential food items are now at an all-time high. Cars, clothes, and jewellery are also going to get more expensive. More, 60 per cent of PF and PPF withdrawals are set to be taxed.

In recent memory, this budget should count as the unkindest to the salaried middle-class that stood resolutely with Modi in 2014.

The addition of an infrastructure cess and the Krishi Kalyan cess to the existing Swacch Bharat cess is regressive and will prove to be counterproductive, when the government is desperately trying to revive domestic demand. It is also an indication that the government has no intention of creating a simple and uncomplicated tax stucture.

India’s export crisis will remain. The Economic Survey shows a dramatic fall in both exports and imports. It blames external factors and a sluggish world economy. But other countries, for example, Vietnam and Bangladesh, seem to be doing just fine.

The fact of the matter is that the global economy has been bad since 2008, but India’s exports and imports have never been affected the way they have been now. Exports contracted for two years consecutively. Cumulative exports in 2014 (till December) were $239 billion, cumulative exports in 2015 (till December) were only $196 billion — an overall 18 per cent decrease! This budget has little or no solutions to addressing this impending crisis.

The budget fails on many other grounds. The infrastructure sector has not received the much-needed push. Furthermore, job creating sectors such as IT, FMCG, realty and banking have received mere lip service. There is no real impetus to urban development schemes.

The smart cities scheme that was announced with a great deal of fanfare in 2014 did not find a mention in Jaitley’s budget.

The Black Money Bill as well as Gold Monetisation schemes that were announced in the last budget have also proved to be colossal implementational failures. The biggest failure of this budget, however, is the paltry ₹25,000 crore that has been allocated for public sector bank recapitalisation. This is absolutely inadequate given current stress levels. There is a need for more than ₹4 lakh crore! This will significantly curtail job opportunities for the youth due to declining private investment.

Other piecemeal measures such as renaming the department of divestment as the department of investment and public asset management, and Clean Energy cess to Clean Environment cess are typical Modi gimmicks.

If only name-changes could be game-changers! And in what is the mother of all ironies, everything Modi seems to abhor, such as MGNREGA, Aadhar, PPP, etc have been glorified and strengthened in this budget; so much for confidently proclaiming these projects to be the monuments of failure of the UPA regime.

In the next few days, Finance Minister Arun Jaitley will have to explain how he has managed to increase spending while maintaining a low fiscal deficit with so many exemptions. For now, the maths simply doesn’t seem to be adding up. The questions have only begun.

The writer is national spokesperson for the Indian National Congress