Every year the same thought comes to my mind: Do we really need a Budget? A really, really radical idea which I am sure even a Prime Minister with a two-thirds majority will shoot down, is to abolish the Budget altogether. Perhaps that is too extreme. But perhaps a future Prime Minister —or even Narendra Modi who is so keen on systemic change — will divest Budget Day of all its hoopla, and reduce it to its essentials, which is that it is basically an accounting exercise.
I will give my reasons why this should be done. First, and foremost, the Budget gives undue importance to the finance minister. After all, the Budget, as it has now traditionally become in our country, goes beyond purely fiscal matters to matters of all-round policy. Does the finance minister lay down general national policy, or does the Cabinet, in which the PM is first among equals? In short, the Budget ends up elevating the finance minister to a level seemingly higher than the Prime Minister himself.
Secondly, the Budget build-up is so great, with daily, then hourly, opinions from economists and sundry “star” experts on TV and newspapers, that you wonder if this is a finance ministry matter or a media creation, of and for once-a-year experts. Incidentally, isn’t it self-delusional for these experts to give their brilliant ideas just a week or two before the Budget? What’s the point of their advice? Does the minister or his team have the time to actually read their words of wisdom? Do they change the Budget after reading Expert A or Economist B? Since all this is implausible because of the time factor, the experts and economists are only talking to each other.
Third, does any other developed country spend so much of its energy on the Budget? The British parliamentary system is the model for our parliamentary system. Why, then, don’t we look at how they handle their annual ritual? They handle it like a routine accounting exercise. Last year’s revenues so much, last year’s expenditure so much, therefore deficit this much. Similarly, projections under the same heads for the coming year. Policy announcements are made as and when they become necessary through the year. Taxes are tweaked as the year goes along. Since the world economy affects your economy as do unforeseen developments elsewhere on the globe (war in Syria, unrest in Egypt, Brazil’s defeat in the World Cup), a country needs to improvise and innovate as it goes along: no contingency fund allocation in an annual Budget can actually deal with all possible contingencies.
Fourth, it’s generally accepted now that we live in two very different countries. There is India, where you and I exist, and there is Bharat, where most of our countrymen live. Who is the Budget addressed to? India, of course. The citizen of Bharat, forming the huge mass of our country is not only a silent majority, it is not even aware of the Budget, let alone affected by the buzz around it.
As it happens how many people actually understand the Budget? I am a reasonably aware individual. I keep abreast of current affairs and of the nation’s economic state, but when I hear the finance minister reel off figures, they are in one ear and out the other. So, why do I watch? Because I am expected to. How many watch in the same way? Ah, cigarettes to cost more. Good, screw the smokers. Aerated drinks to cost more. Great health move. TVs to cost less. About time. Income-tax slabs left untouched. Thank the Lord… As it happens, most of these eye-catching announcements have very little impact on the overall Budget since their numbers are small. Which means that the bits we do comprehend, are terribly unimportant.
Fifth, the people of India who do understand the Budget, are completely unsympathetic to the people of Bharat who are most affected by budgetary provisions which are applauded by people of India. “Populist measures!” people of India shout derisively when the finance minister says kerosene subsidies remains as they are. “All politicians are alike” people of India sneer contemptuously when the finance minister leaves MGNREGA untouched, though it’s a UPA scheme. Yet these very projects and subsidies are vital for the people of Bharat, often making a difference between a square meal or starvation.
Sixth, the Budget of the Government of India does not give the finance minister as free a hand to tinker with the government treasury as we imagine. Sixty-five per cent of the total figure goes into defence, government salaries and increments, repayment of debt, interest on debt and other such heads which cannot be touched. In the remaining third, there are a whole lot of ongoing schemes from the previous administration to discontinue which would have serious implications. So what percentage of the total does the finance minister actually have to work with?
Seventh, the finance minister (not just Arun Jaitley, but most FMs), hide things or disguise them to lessen their negative impact. If they don’t hide them, they keep them outside the Budget. For example, the very important announcement of massive hikes in fares were announced before the Railway Budget, and not in the Lok Sabha. Similarly, Mr Jaitley did not talk about the Rs 63,000 crore enhanced target for disinvestment in his Budget speech because he thought that doing so would cause a ruckus in the House. In the same manner, retrospective tax, labour reforms and FDI limits were either avoided, or kept in the fine print of annexures.
Eighth, there is Mr Jaitley’s own Rs 100 crore club. Madrasa uplift Rs 100 crore. Tribal welfare Rs 100 crore. Ghat development Rs 100 crore. Those who kept count found 28 schemes that were allotted this magic figure.
What that suggest is that many of the Budget’s figures are arbitrary and quickly tossed in. How reliable then are the Budget’s overall figures?
Ninth, and last, given all these factors, every Budget is bound to fall below people’s expectations which are raised to fever pitch by a frenzied media.
There you have it. Every Budget, however hard each finance minister tries, is doomed to failure. So why bother with the big bang which will never happen? Why not do small bangs through the year? That will be more thoughtful, more rational and better for everybody.
The writer is a senior journalist
