A hopeless budget from a trustless government

While presenting the fifth budget in the past four years, Union Finance Minister Arun Jaitley seems to have forgotten the previous promises of his government. The circumstances in which this budget has been rolled out first need to be looked upon.

While the budget is being billed as pro-farmer, the government has already lost the faith of the Indian farmer as its promise of providing minimum support price for farm produce has turned out to be mere rhetoric.

After having failed to create jobs, the government has lost the faith of youth as well. Given the skyrocketing prices of all essentials, sharp rise in fuel prices, demonetisation and the GST disasters, the government hardly inspires any confidence in the middle-class either. Most of the health schemes announced in the budget are going to benefit the insurance companies instead of the poor, as has been the case with crop insurance schemes.

The government has already revised deficit target for 2018-19 to 3.3 per cent of the GDP, against the earlier target of 3 per cent, after breaching the deficit target for 2017-18. It’s yet to prepare a roadmap as to how this is going to be reduced over the next year. In light of these facts, the current budget of the Modi government doesn’t seem promising enough.

The budget reflects on the Modi government’s unfulfilled promises in all spheres. It testifies to job deficit, trade deficit and an overall governance deficit. If one puts together all these deficits, then the Modi government comes across as a trust-deficit government.

The Modi government, notorious for its empty slogans, also appears to be a ‘surcharge’ government. Finance Minister Arun Jaitley today proposed to replace the existing three per cent education cess on personal income tax and corporation tax with a four per cent 'Health and Education Cess', apparently to pay for the social welfare schemes of the government.

After speaking for about an hour in Hinglish and faltering at words like Eklavya, the Finance Minister finally talked about jobs and employment. It is a well-known fact that creating new job opportunities is a huge challenge for any economy. And if this aspect is not paid adequate attention to, it transforms into a huge problem. But the Modi government is not ready to accept it. There was no announcement in the Budget speech, whatsoever, about the private investment in sectors that could contribute to job creation.

If we talk of fiscal deficit, then it is clear that the government is making false promises and is also not able to fulfil the promises it made earlier. The government had promised to itself in the previous budget that the fiscal deficit would remain 3.2 per cent. This promise has already been broken and in the Budget speech, the FM accepted that the fiscal deficit remained at 3.5 per cent, or Rs 5.5 lakh crore. That means the economy has earned less than it has spent.

For the next year, the government has kept a deficit target of 3.3 per cent, but has neither suggested any way to increase private investment nor a method to increase the tax base. In such a situation, when there is no earning, where will the money come from and how will the government be able to reduce the deficit?

The government has benefitted from the crude oil prices and could very well have used it properly, but failed miserably in doing so.

The FM presented another figure regarding exports to show that economy is in a good shape, saying that the exports are likely to increase at the rate of 15 per cent in the current fiscal year. But the reality is different. If we see recent figures, we come to know that in 2013-14, the growth rate of the merchandise export was 4.7 per cent which fell to -1.3 per cent in 2014-15. In 2015-16, too, this figure remained grim. But the imports have registered a huge growth. That means we are facing huge trade deficit as well.

This government has already ended the tradition of presenting rail budget. It was expected that this department will get a special mention in the budget speech, but unfortunately, the FM wrapped up this important department in a few minutes. We witnessed many rail accidents over the last year. The situation became so bad that the government had to shunt out the railway minister. But provision for railway safety made by this government is almost half of what the UPA government had determined for the same.

This budget, as a whole, can be called a ‘taxing budget’. There are a lot of figures and data, but nothing concrete comes out of the maze of these data. So, the question is, who is going benefit from this budget?

National Herald tried to collect people’s opinion on this and 76 per cent of the respondents said that this budget would benefit only the big corporates. Only 17 per cent of people said that this budget would be good for farmers, who were time and again referred to in the budget speech. Eighty-two per cent of the respondents believed that it would have a negative impact on them, as far as personal income tax is concerned.

This poll makes one thing very clear- whatever trust people had in the Modi government is waning fast.