Make no mistake, this is a political Budget
Last updated on: July 11, 2014 00:35 IST
Budget 2014 is curtain raiser to the Budget of 2015, says Sheela Bhatt in her analysis of Arun Jaitley's maiden offering.
"I want to give you more, but I don't have money." That was the candid message of Union Finance Minister Arun Jaitley. He had a tough situation before him around 40 days back when he started planning the Budget.
The Indian economy is passing through tough times, inflation is high and expectations of the people are sky-high. At same time it's just 45 days that his government has been in seat of power. In such a short time he has done what best he can do.
Chutney-sized fund allocations, pickles of a few varieties as he launched some new projects across the Himalayas and north-east states, and new subzis in form of help to women, farmers, defence, tourism and the insurance sector. But, dal-roti-chawal, the staple diet of all past Budgets remains. Like; subsidies, allocation of welfare schemes like MNEREGA and the mid-day meal scheme. He presented a conventional tiffin-box but not the sumptuous chappan bhog.
It's not an earth-shattering Budget but it has the mark of quintessential Jaitley in some sense. He was advised to speak in Hindi but Jaitley preferred English since he wanted to appear 'natural'. Unlike previous finance ministers, there were no proverbs or couplets or quotations from great personalities during the long presentation. Jaitley's speech was direct and businesslike. Even references to Prime Minister Narendra Modi were minimal, just once or twice did he mention the prime minister.
Power sits lightly on Jaitley's shoulder. Just because earth-shaking election results have brought his party in power, he has not gone recklessly ambitious. "Too soon, too fast" is not what he likes. No big bang reforms nor complex presentations. He, understandably, said the steps suggested in the Budget are only the 'beginning of the journey'.
He has played safe by not unveiling the long-term plot of Prime Minister Narendra Modi's government so quickly in the day. Within 45 days, he could grasp that the government coffers are empty. The first thing he decided was to ensure that no big-ticket project should be announced which will transfer the burden of paying back on the future generations. He very precisely said so in his speech that, "we cannot spend beyond our means."
He said we need to introduce fiscal prudence that will lead to fiscal consolidation and discipline. The first 20 pages of his speech were the most important where he said emphatically, "Fiscal prudence to me is of paramount importance because of considerations of inter-generational equity. We cannot leave behind a legacy of debt for our future generations. We cannot go on spending today, which would be financed by taxation at a future date."
Jaitley's Budget is once more like the railway budget giving the feeling of 'continuity'. The Budget concentrates on tourism, agriculture and promises new avenues in the defence and insurance sector. The defence budget last year was Rs. 203,672 crore. This year it's Rs 229,000 crore.
Since Jaitley is a lawyer he has cleared lots of legal anomalies that any finance minister should have done with help of the law ministry. To attract new foreign direct investment he has said that now onwards no corporate would be charged tax 'retrospectively'. So in the Vodafone tax case he has not helped them directly but he has done enough to create confidence in future investors.
He says the current issues between corporates and the government about application of tax laws will be expedited and no new cases will be added. The old quarrel (Vodafone) will be settled through the courts. Also, he has made clarification in distribution of dividends. The tax is 15 percent on Rs 100 but some companies were deducting it on Rs 85. The clarification won't make any difference to shareholders who are receiving dividends but companies will not be able to play smart, anymore.
This is a political Budget, no doubt. In 45 days no FM or PM can bring about a quality change in the financial system so Jaitley has 'chutney-fied' the allocation. Take up each class, community, region and sectors and give them some promise. And, tell them to wait for the next Budget.
When a Salman Khan film rakes in Rs 100 crore he has gone for allocation of budgets of Rs 50 crore to Rs 500 crore to some good and some average ideas. Give IIMs, IITs and AIIMS to different states like some 'ladoo' in each plate. When asked why he is giving just Rs 100 crore each to schemes like Himalayan studies, organic food farming, for youth leadership, the Manipur Sports University, ghats on the Ganga etc, the explanation was that since any new project takes four months to take off and spending starts a little later. So in this year, the funding looks small but it's enough in view of the late Budget.
The new Budget makes MANREGA employment scheme conditional. Although it's not scrapped or funding hasn't been reduced but it is linked to, "productive, asset creation, substantially linked to agriculture and allied activities."
The Communist Party of India-Marxist has complained that, "The Budget proposes a decline in subsidies to petroleum by Rs 22,054 crore which would impose more burden on the people and further increase the inflationary pressure. Moreover the Budget has no concrete proposal to check the double digit food inflation especially when there is a possibility of mounting pressure on food prices given the projections of a bad monsoon."
But industrialist Rahul Bajaj had the answer. He said, "This is all Jaitley can do in view of the state of the economy."
Jaitley has kept focus on women, youth and old. A staggering amount of Rs 10,000 crore has been allotted for start-ups in micro, small and medium industries. This is the best feature of the Budget. Also, Jaitley has not touched the basic framework of subsidies etc of last ten years of the UPA government.
It seems Gujarat, Andhra Pradesh-Telangana and many pilgrimage places all over country have gained more than others. Like, in Gujarat diamond merchants, semi-precious stones exporters and Alang shipping yard's ship dealers have gained. Also the Rs 200 crore for Sardar Patel's 'Statue of Unity' over the Narmada river will also change the economy of the area completely.
On Thursday, the BSE Sensex may have gone topsy-turvy but it's a short-term indicator. Arun Jaitley always stands for the long term.
Today, Jaitley created a flutter in the country when he complained of back pain. He had cervical pain due to standing for more than 45 minutes. His back started aching after 45 minutes. He was leaning towards the reading table. Jaitley, these days, is not able to take his routine walks in Lodhi Gardens due to heavy responsibilities.
Since the last 45 days he shuttles between the finance ministry in North Block and the defence ministry in South Block. Since many years he suffers from routine health related issues and gets leg pain too. His request to Speaker Sumitra Mahajan to sit down and read the speech was unusual but human and moving. Probably, first time in history of Indian Budgets, the finance minister sat down to read the speech.
What touched many journalists was his normal behaviour soon after the Budget. He went to his room and ordered food. Today being a special day, all visitors and even journalists were offered lunch in his office. He had roomali roti and chicken curry. He chatted freely with journalists and his party-men. He explained nuances of his Budget as only he can. In the midst of all these he even mentioned that how he was amused to see some VIP in a small BMW car protected by two police vans when he went to see President Pranab Mukherjee.
Before going for interview in Lok Sabha television he asked with smile to a reporter of a Hindi channel, "Did you gain today?"
That smugness which we media-persons encountered around the finance ministers of the UPA has gone for good today.
( hari krishnamurthy K. HARIHARAN)"think of them as Sand paper.
They Scratch & hurt you,
but in the end you are polished and they are finished. ''
No comments:
Post a Comment