Budget: A calculated gamble of Modi govt ahead of polls

By MV Rajeev Gowda The Modi government has taken a calculated gamble that the general elections will be over before the Indian public has a chance to find out that its “dream budget” is pure chicanery. Unfortunately for it, enough commentators are digging deeper to expose the hollowness of this government’s budget sops.Consider how the government has gone to great lengths to project itself as fiscally responsible. Yet it has continuously missed the targets in the Fiscal Responsibility and Budget Management Act. It will miss them by a mile again. The Comptroller and Auditor General recently criticised the government for the mega amounts of borrowings that were off the budget books. The same tricks continue.Given that the goods and services tax revenue is short by Rs 1 lakh crore, there is no way that the deficit targets will be met, thus stressing the economy. Further, the budget speaks about achieving significant disinvestment targets, which will generate huge amounts to fund its new programmes. But the truth is that the Modi government has failed miserably at disinvestment.It has only been saved by LIC buying a majority share in the debt-ridden IDBI (the bank’s gross non-performing asset was nearly 27% of gross loans, or Rs 55,000 crore) in an attempt to bail the government out. That is not disinvestment, it is deception. One government entity buying another government entity creates no new revenue for the state. This jugglery helps the government cook its books but leaves the economy unsustainable.A similar deception marked the ONGC-HPCL deal. In that case, ONGC bought a majority share in HPCL at a premium of 14%. By the end of the year, ONGC was left indebted. And we must remember how a certain Gujarat chief minister’s actions left ONGC with tremendous losses in the GSPC-KG basin case.After ignoring acute rural distress across five budgets, the Modi sarkar has woken up. But it provides an inadequate Rs 6,000 per family per year, when the average farmer household debt is Rs 47,000. Further, the Kissan Samman Nidhi scheme does nothing for landless labour, tenant farmers and sharecroppers. Given that there has been a decline in real wages in rural India since 2014, the budget offers nothing to alleviate this distress. But it sings the same song about doubling farmers’ incomes in a few years.Indian agriculture is witnessing one of its worst price slumps. Since July 2018, farm-gate prices have been crashing. Indian farming families today are facing a severe decline in income. Therefore, a measly Rs 17 a day is rubbing salt on their manmade wounds. This income support would not be enough to cover the rise in agricultural input costs.Another major issue with the Kissan Samman Nidhi scheme is gross fiscal impropriety As pointed out by Yamini Aiyar, income support has been operationalised retrospectively, which is a violation of budgetary convention.The budget announced Rs 60,000 crore for MGNREGA. However, historically, it has never released funds due to states on time, thus driving away the poorest who desperately need this lifeline. Judging by how the government is counting on reallocating “saved” expenditure to support its farmer scheme, we can expect MGNREGA to continue to be starved of funds.After having indulged in what BJP has always described as “populist”, “doles”, and “sops”, the budget had nothing to offer to our young. The eve of the budget was marked by the revelation of unemployment at a 45-year record high. CMIE reported 1.1 crore job losses in 2018 alone. Despite the grim jobs scenario our youth face, there was no attempt to even address this challenge. It felt like India Shining all over again.Interim Finance Minister Piyush Goyal mentioned Startup India, yet offered no relief from the perverse angel tax. He touted Mudra loans, which are on average so small that one could not run a pakoda stall. He failed to tell us that the government’s flagship programmes have actually failed to achieve anything on the ground. Fewer numbers refill their LPG cylinders, large numbers with toilets at home still defecate in the open, and the Ganga is more unclean.As for city dwellers, the much touted middle-class tax rebate will not come into effect until a new government implements it. The urban poor did not merit attention in the budget, while people who own two to three homes were singled out for rewards.Commentators have termed the sop-opera as a Pradhan Mantri Bachao Yojana. True to its record, BJP performed poorly even on this front. Today, a young woman has fewer chances of finding a job, a small shopkeeper is distracted by references to nationalism as the ill-implemented GST eats away his income, a SC/ST student still faces hardship receiving a scholarship, a child in Gorakhpur continues to risk contracting encephalitis, a soldier stoically guards our border knowing this is the lowest allocation for defence, percentage-wise, since 1962.The budget made it clear that the past five years have been a failure. This was a last-ditch attempt at trying to fool the people. Thankfully, the general election will usher in a change of government and a chance for the Indian economy to get back on its feet again, free from the clutches of the Modi regime that unleashed surgical strikes like demonetisation on it.Finally, it is good that the budget is going to allot resources for strengthening artificial intelligence. If we had that technology on budget day, it would have processed the relevant data in the blink of an eye and flashed “JUMLA” on our TV screens every time Goyal made an announcement and the BJP ranks thumped their desks.(The writer is a Congress MP and chairman of AICC research department)

from Economic Times http://bit.ly/2Uyrcqj