Herald View: Will budgeting for the people of India be old wine again ?

For the last seven years the government at the Centre has fancied itself as disruptive and reformist. Many of its policies have undoubtedly been disruptive, starting with a questionable Demonetisation of currency, the flawed Goods and Services Tax (GST) and the sudden lockdown of the economy. It has however stopped short of making administrative, judicial and policing reforms. It has fudged data and stopped releasing data that it finds embarrassing to reveal. It has also disrupted established conventions to centralise all decision-making in the Prime Minister’s Office. Budget provisions have scarcely been debated in Parliament. Questionable provisions like Electoral Bonds were introduced surreptitiously despite opposition from the Reserve Bank of India. And although the Government’s revenue increased sharply since 2014, in no small measure because of the decision to sell family silver and due to international petroleum prices, which crashed, there are reasons to believe that the Government’s spending has been wayward. Large amounts have been spent to promote events abroad like the International Yoga Day and the Prime Minister’s visits to foreign capitals.

Equally large sums have been spent on establishment, publicity and on entertainment. Luxury planes have been bought for the President, Vice President and the Prime Minister in a bid to compete with leaders of more developed countries. Money has been spent on statues, apps, beautification, construction, sea-plane services and on metro rails in cities where they were not needed. To top it all, the Government has reduced allocations for the social sector, education and health, stopped scholarships and has gone all out to privatise public assets. The Union Finance Minister has of course boasted that the Budget this time would be one of a kind, going to the extent of suggesting that it would be ‘one in a hundred years’ budget. But given the past experience, one must be sceptical of such grand announcements, of which there will no doubt be plenty when the Union Budget for 2021-22 is presented. None of the seven Budgets presented by this government till now gives cause for optimism; and it will be a pleasant surprise indeed if the Union Budget this time turns out to be very different.

While the Government continues to be in denial, the fact is that the situation in the country is grim. Jobs have not only been lost but they are hard to come by. Even those having done their doctorate from Indian Institutes of Technology are finding it difficult to find a suitable placement. Higher education has gone out of the reach of the common man as private institutions for profit have taken over higher education. A record number of Indians are going abroad to study while prohibitive costs in the private sector are depriving the vast majority of education and healthcare. While the Union Government pampers its less than four million employees, none of whom missed their monthly pay packet during the pandemic, a majority of the population are impoverished, jobless and starving. A radical change in the way the Union Government raises revenue and spends it is clearly necessary.

The Government’s insistence on depending on regressive indirect taxes which disproportionately burdens the poor and its strange reluctance to tax the rich also needs to change. One hopes the Government has learnt its lessons and its first post-pandemic Budget will be used for the much-needed course correction. Union budgets cannot do miracles. But it will suffice if it sets the priorities right and channelizes revenue to where they are needed.