Clever Guptaji has switched on the TV to see the Union Budget. In the meanwhile, Netaji has just received his RT-PCR test results for Omicron and is gloating over the fact that he has tested negative. An uncomfortable Budget conversation unfolds…

Netaji (dreamily): By God, this is the best thing that has happened to me in a long time. It is such a huge relief to be negative! Negative is the new positive, I tell you!

Clever Guptaji (deeply immersed in the 6.4 per cent fiscal deficit announced by the FM and surprised beyond belief at such sensible utterings from Netaji): Well-said, Sir! Negative is totally the new positive. She has really announced a huge negative balance today! The Government seems to be determined to spend its way into a speedy recovery — the Gati Shakti! Though it is impressive that we are spending ₹10.68-lakh crore effectively on the capital account, I am not too sure that such a huge negative balance is a positive. The deficit will eventually put pressure on liquidity and/or inflation, which might actually harm the fledgling recovery badly.

I wish she had reined it in at about 6 per cent, that would have given the Gati better support from Shaktiji at the RBI. How times change though! In pre-Covid times, a fiscal deficit standing at 6.4 per cent of the GDP would have created such a hullabaloo! I remember the times when even 4 per cent was considered such a sacrilege. With 6.4, all those MBAs and doctorates at Moody’s and Standard & Poor would have simply run us down with a ratings downgrade.

N (not quite following CG’s tirade): Why is your doctor moody, Guptaji? And is he poor also? Tch, tch, you have an affinity to choose bad eggs, Guptaji!

CG (tongue-in-cheek): Can’t disagree on that, Sir.

Political economy instrument

N (continuing on his current favourite topic of doctors): Go to a good doctor! My doctor told me firmly that I need to have, errr, Covid appropriate behaviour at all times! Always masked, especially in political rallies! Masks and politics have to go hand-in-hand, Guptaji!

CG (marvelling at such deep philosophy): The political intent does seem to be masked this time around. There is simply no mention of any of the poll-bound States in the Budget! That is really so interesting! Given that Budgets are inherently such political economy instruments, and given that five States are on the threshold of elections, this is really strange! And we do have such a solid history of announcing new trains, new highways and even new universities in poll-bound States.

N (completely confused): Guptaji, I cannot sanction you any holidays now. And why this sudden urge to go traveling in new trains, I don’t understand.

CG (continuing with his train of thought): Of course, it could be the case that the expenditures will eventually be directed to States in which the Centre has some interest. After all, the Budget just creates an overall framework of schemes through which expenditures are channelled. States have to demand those funds and also put in a bit of their own funds for commitment in the Centrally-sponsored schemes. There’s no knowing which States will be able to successfully get funds under the schemes. Having said that, it is still impressive that the capex spending of the Centre is so high!

N (exasperated): You have to wear a mask, not an impressive cap! My doctor says its not very safe to travel yet – just watch some travel videos, Guptaji! I hear that e-travel is the new trend!

CG (now eyeing boss with reverence): True, that! Thematically, the Budget seems to be well-focussed on getting it right digitally. Whether it is kisan drones or the PM e-vidya classes or Saksham Anganwadis or digital banks or policies for animation and gaming sectors, the Government seems to be going all out to use digital platforms for driving inclusion and recovery. Startups will start India up. The Government doing 68 per cent of its procurement domestically with quick payments is also good.

N (shouting): No, I am not going to make quick payments for your impressive cap in the new train!

CG: I do wish that the common man was given some respite — an increment in the 80C limits would have been perfect. Though, of course, it is difficult to say whether the resultant consumption and increment in GST would offset the decrease in I-T collections. Ah, the trials and tribulation of being aam admi!

N (now red and blue in the face): What? Now you want to eat an aam in the new train wearing your impressive cap? Never! Don’t listen to the moody doctor. Try to bring in more balance, man!

CG (quietly): Exactly my point.

The writer is a brave economist trying to laugh against the odds