New Delhi: The Budget is a vote catcher, its centrifugal force revolves around the acute farm distress and agrarian crisis, monotypical primarily because there is a food glut and yet pricing erosion is playing havoc with homesteads in Bharat.
Most of the spending announced seems to be on “productive investments” rather than “one-time handouts” said Mr Joy Rankothge, VP of Moody’s, summarising the Budget proposals.
Export of agriculture commodities is to be liberalised and giving 100 per cent tax deduction for the first five years to companies registered as farmer producer companies with a turnover of Rs 1 billion and above is part of that same strategic imperative of tamping down rural discontent.
Bonds slumped after the Centre set a slightly wider-than-expected budget deficit target for the next fiscal year, while shares clawed back the earlier, bigger losses as investors welcomed spending in key areas of the slowing economy. But an eerie silence enveloped Mumbai’s financial district, for the next consequence will see interest rates rising. Perhaps, even a pre emptive strike from Mint Street should not be ruled out.
Another category of voters, the youth and middle class, were looking for some succour for their woes, but got nothing. The assembly lines of unemployed youth in an era of jobless growth, and an angry middle class unhappy that it has got nothing are elements the BJP will have to contend with.
The standard deduction sop is too little too late. The combination of long term capital gains on equity investments and equity mutual funds and higher education and healthcare cess of four per cent against the existing three per cent, are also viewed as negatives
The salaried class, which is a handsome contributor to tax revenues at Rs 76,000 on an average per assessee, and the investor community, were left out in the cold.
In totality, this is an election budget and Mr Modi’s continuing ability to be disruptive and calling a snap poll should not be ruled out. This way he will achieve the twin objectives of simultaneous polls — he can go with state polls in Rajasthan, MP and Chhattisgarh in November-December and concurrently call polls. It will be a typical Modi manoeuvre.
