Interim Budget 2019-20: Populist to the Core
By Amar Yumnam
The term of the Narendra Modi-led government in the Centre is ending soon and elections for a new Lok Sabha are round the corner. This being the case, the prevailing government can only think of an Interim Budget for the present commitments cannot be made binding on the future government that would be formed after the parliamentary elections. A budget has many instrumental values. First, it reaffirms the democratic process of the country for evolving a shared commitment to what the nation should be concentrating on in the forthcoming periods. Second, it gives direction to all the functionaries of the government on how and what actions are to be focused on in the forthcoming months. Third, consequent upon these, the people formulate expectations and plans for convergence with government actions and to avoid potential private losses.
It is for these reasons that the people do take interest on any new budget when the government announces. In other words, a budgetary exercise is never an exercise in an empty vacuum for futile objectives.
I have given this brief background on the budget for the Union Finance Minister has just presented to the Indian public an Interim Budget as if it is a regular budget. Here it would be relevant to recall certain background facts preceding the budget. First, unlike in the past, the country has not been given the Annual Economic Survey before the presentation of the budget. The significance of any budgetary proposal can best be appreciated only in the context of the prevailing scenario of economic dynamics of the country; here lies the significance of Economic Surveys. But we have been given the budget only and without the Economic Survey. Second, there has been a recent case of a la carte kind of data manipulation to effect higher growth performance scenario during the period of the present regime. Third, there has also been the case of the Report of a National Sample Survey on Employment being withheld by the government for revision to hide some unpleasant facts; the latest unemployment rate of the country has turned out to be the highest during the last four and a half decades. This is something the government, in the end of its term and elections approaching, would not like the public to know. Fourth, the country witnessed, besides these data related suppressions, the resignation of the Experts from the national statistical body complaining against the unwarranted behaviour of the present government on socio-economic data.
It is in this background that Piyush Goyal, Union Finance Minister, has given us the Interim Budget 2019-2020. The Budget is presented as a means for “moving towards realising a ‘New India’ by 2022, when we celebrate 75 years of India’s independence: an India which is clean and healthy, where everybody would have house with universal access to toilets, water and electricity; where farmers’ income would have doubled; youth and women would get ample opportunities to fulfil their dreams; an India free from terrorism, communalism, casteism, corruption and nepotism.” Some key focuses of the Budget are: (I) Income support to low landholding farmers at the rate of Rs. 6,000 per family to families having 2 hectares or less farming land area; (II) relaxation of tax norms for the salaried class; (III) revision of benefits for the wage earners; (IV) deepening and widening the digitisation process of the country; and (V) enhancement of the allocation for the Northeast.
Now the questions arise as to how far are these focuses real and robust. The problems arise exactly here. The biggest drawback of the promises made in the Budget is that there is no structure binding the objectives. The income support being promised for the farmers amount to nothing more than a corruption for the forthcoming elections. A sum of Rs. 6,000 per year and to be paid in three equal instalments do not reach any threshold level of investment to satisfactorily perform any activity. While the demand for upper revision of taxation limit for income tax has been there for some time, the government should have thought of this jointly with the necessity for enhancing the capability of the farmers to invest and innovate. The fundamental need is to ensure a sustainable facilitating environment for the farmers to improve their production capacity at this juncture of the economy. Endeavours on these should also be necessarily converge with the innovation focussed policies.
This is where the budget comes out weakest as there is nothing about knowledge enhancement policies. Innovation can be possible only when there are complementary factors being present. The capability of the farmers needs strengthening. The capability of the small enterprises to innovate needs enhancement. The capability of the government to frame and effectively strengthen implementation of innovation policies should necessarily be made robust. But the absence in the Budget of any policy attention on education and knowledge enhancement make the promises in the Budget as but hollow. Further, the promised enhancement of allocation for the Northeast is but a trick. We must realise that the allocation for the North Eastern Council has been brought down to almost zero without even taking the Chief Ministers and the Governors of the region into confidence. It has been only in recent years that the NEC has been evolving towards a real development agency. But very unfortunately even NEC is now subject to the demolition of institutions scheme of the present government.
Well, the present regime has been good in verbosity though wanting in performance and delivery. It is right when the Finance Minister says that a Budget is “but a medium of the country’s development journey. All the transformation that we are witnessing, is because of the people of our nation. The credit goes to them only”. But when it comes to policies, the Budget says the public are nothing more than electorates at the time of elections.
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