Finance Minister Pranab Mukherjee has presented a Budget that is inspired neither by a big idea nor does it address the two major concerns before the country - inflation and corruption.
I will go so far as to call it a heartless Budget as it shows the inadequacy of the ruling establishment in not utilising 46 million buffer stocks of foodgrains, twice the amount of storage capacity, when food inflation is at its peak. Why was this stock not offloaded into the market and allowed to rot? Inflation is one of the most serious issues confronting the Indian economy.
Food inflation has adversely affected the common man. Except for a routine monetary exercise of increasing the interest rates and curbing the money supply, the government has no idea as to how to deal with the issue.
The Budget was expected to address the issue of black money.
Unfortunately, nothing has been done. Sucking black money out of the system will also reduce the additional liquidity for this colour of money from the market.
Sectors, which are responsible for generating excessive black money, had to be looked into and remedial measures had to be found. The finance minister has ignored the extent of the problem that is eating into the very vitals of the Indian economy.
Expanding productivity too has not received adequate attention. In agriculture as well as manufacturing, there seems to be no long- term plan. Increased interest rates in the long run will only make the economy non- competitive in the global context. It will also hamper the manufacturing sector that is extremely important for creating new employment avenues, particularly in view of the underemployment in the agriculture sector.
The government's figures of reducing fiscal deficit, from 5.1 per cent to 4.6 per cent, were based entirely on the amounts realised from the 3G spectrum auction. If the Prime Minister's theory of spectrum not being a revenue- raising exercise but merely an effort to increase tele- density for the 2G spectrum has been accepted in the 3G spectrum, even this would not have happened. In the absence of such facility next year, reduction of the fiscal deficit appears to be more challenging.
A special mention has to be made about steps to increase healthcare cost.
Public healthcare is overcrowded and inadequate. It is essentially meant for those who are unable to afford private healthcare. To make private healthcare costlier is, therefore, a cause for serious objection.
Much has been said about youth power in India, but the Budget gives absolutely no impetus to job creation.
In the absence of expansion in the manufacturing sector, employment opportunities are not likely to be generated. The 8.6 per cent GDP growth is essentially on account of 9.6 per cent growth in the service sector in which the government has a minimal role. The manufacturing growth is declining.
The 5.4 per cent growth in agriculture is an optical illusion since the 2009- 10 agriculture growth was lower on account of uneven rainfall. Thus, in a normal agriculture productivity year following a low productivity year, the percentage increase contributes to larger GDP growth without having an impact on the economy.
To the middle class, salaried employees and others, this Budget offers no cheer.
The nominal increase in tax exemption is more than offset by inflation, rise in prices of food items and various other increases influenced by the Budget.
'Food inflation has adversely affected the economy. Except for a routine monetary exercise, the govt has no idea how to deal with it'