Sometimes, I feel, we Indians have got a habit of complaining and cribbing for almost everything that the government does.
Yesterday was no different, when the much hyped budgetary hoopla once again gained the center stage of the Indian psyche.Our Chief Chef, Pranabda, served the Great Indian Curry, the Union Budget, to the people of India, keeping in mind the tastes and preferences of almost everyone from the home servant Ramu, the Nukkad paanwala Raju, the office executive Rajesh and the corporate czar Reliance, and only time will tell, how good the curry is for the health of the Indian Economy.
A little enquiry into the backdrop of the scenario in which the budget has been prepared reveals the following important points:
- The world is under the effect of the worst recession ever, bigger than the great depression, and markets around the world are tumbling.
- Indian GDP growth rate has dipped to 6.8 % in 2009, still the second highest in the world, next after China.
- Foreign funds have dried up in the Indian Markets and therefore there is a dier need for an increased fiscal spending to stimulate demand, which ultimatley links to having a higher fiscal deficit in the present scenario, to stimulate demand and consumption.
- The UPA has won the general elections on the poll plank of Aam Aadmi and socially oriented schemes like NREGA, JNNURM etc.
- The popular sentiment of the Indian masses has been majorly against the disinvestment regime of the government in the PSU's.
- There is a growing need to increase internal as well as external security network and capabilities in view of the increased terrorist and criminal activities, that are threatening to take away the essence of democracy- peaceful coexistence.
- India needs to build infrastructure at a rapid pace to enter into the next stage of economic growth and sustainability.
- The global cilmatic change regime is a major challenge and needs to be tackled right now with utmost importance and sustainable measures.
- The budget has focused on social inclusion, or what we can say as inclusive growth, keeping in mind definite political gains as well as the challenge of putting the economy back on track.
- The flagship schemes of the UPA like National Rural Employment Guarantee Scheme, and the Accelerated Power Development Programme have been given the top priority both in terms of fund allotments as well as in terms of action items, which basically target the rural population, roughly 70% of our total. This is a big paradigm shift from the earlier budgets, and the focus has been on spurring growth through rural empowerment and rural spending. This is a direct indication of the consumer market getting shifted to the vast, untouched rural markets of India.
- The agricultural growth rate has been targeted at 4%, which is a very tough task to achieve in practical, and the major disappointment in this regard is that there is no major scheme announced which deals with implementation policies attached to this goal.
- The government is betting big on rural spending and rual consumption, and the middle class consumer may feel a little unhappy with the fact that he has perhaps lesser items in his kitty.(Read Tax sops)
- The government has certainly increased the spending for higher education, allocated more funds for IIT's and NIT's, but I feel disappointed with the lack of funding and focus in the primary education sector, the base of our society.
- The widening of the standard deduction limit is a mere Rs 10000/-, is a big disappointment. The Middle Class was expecting something much bigger to cheer about, and it will certainly feel cheated, as it is the middle class which will be paying almost the same tax and paying the price of inflation too. Is national development or social development of the Aam Aadmi, something different from the problems of the middle class? Time and again, Middle class feels cheated in this neo-liberal, semi- socialist, semi-capitalist India, and to be honest, our governments have given every reason to them to feel so.
- Some taxes like Fringe Benefit Tax, the CTT have been abolished, some more sops have been extended to IT industry, on the other hand, MAT has been increased from 10% to 15 %, and the smaller players in the IT industry will feel the pinch of MAT, but overall, a balanced menu for the Industry.
- The government has finally focused on healthcare and related services, which is indeed a good sign for a healthy nation.
- There are provisions for separate education schemes for female literacy and this is one single highlight of the budget in my opinion, that will turn into a much larger scheme like NREGA in times to come.
- A great amount of funds have been announced for funding Infrastructure projects, and I think this is indeed a right step, and a much needed one.
- Bharat Nirman, the flagship scheme of UPA, for buiding social infrastructure in rural areas, has been given a great impetus, and looks more of a populist measure coupled with increased employment generation.
- I am sadly disappointed with the budget having no major initiative for skill development, as half of our population is in the agegroup 18-30, and this was the right oppurtunity to use this manpower for national development, an oppurtunity gone missed.
- I am wary of the fact that our fiscal deficit has risen alarmingly to 6.8% of the GDP in this budget, but to be honest, any recession requires expansionary government policies(Read Keynesian Expansionary policy, a fundamental in economics) and at this juncture, I only hope we return to fiscal deficit minimisation as soon as possible, for a large fiscal deficit means we are burdening our future generations with debt, but pragmatically, this is more like a necessary evil than an outright idiocity.
- The government has finally acknowledged the pressing threat of climate change and its good to see National Plan on Climate Change getting good funds to start with.
By the way, can someone please define this Aam Aadmi?
I need a certificate for sure.................