If you are reading this with your morning chai, that may not be the only thing that cheers this Monday, given that in a few hours finance minister Arun Jaitley will present his third and crucial Budget as the Narendra Modi government’s honeymoon period is all but wearing thin. The government has from the outset been promising “achche din”, but this is yet to be felt by the aam aadmi, still reeling under high food prices, particularly of pulses and eggs, the poor man’s protein. In petrol and diesel, the government pocketed the benefit (Rs 63,000 crore) of the 60 per cent slump in global crude prices, with barely 10-12 per cent of this passed on to consumers. The government, of course, had its own priorities, but it lost a real opportunity to deliver on “achche din”.
If the chief economic adviser’s Economic Survey is anything to go by, this could be a Budget tilted in favour of addressing rural distress, that will help many industries if purchasing power is put in the hands of farmers and agricultural labourers. The National Rural Employment Guarantee Scheme, which was played down in the last Budget along with health, education and social welfare schemes, will benefit dalits, who form 41 per cent of the agricultural workforce, with Scheduled Tribes slightly lower.
One must acknowledge the Budget has its limitations: it’s basically a document that presents the government’s proposed expenditure plans — both Plan and non-Plan — and how and from where it intends to get its revenue. The rest of what the government is expected to do has to be done through administrative decisions. The Economic Survey noted the government should tax the super-rich heavily, and that includes India’s 111 billionaires, and rich farmers should also be brought within the tax net. Taking a cue from Mr Modi, it also noted how incentives for the corporate sector should be cut, and computed how the rich benefit in six items like electricity and aviation fuel to the tune of Rs 1.03 lakh crore.
If Mr Jaitley’s Budget on Monday really takes steps in this direction, one can only imagine the huge disappointment and discontent in this group. The corporate sector and its lobbies have been seeking more incentives at a time when there are few opportunities for growth due to the slowdown in China, Thailand, Malaysia, etc, and also because investments are sorely needed.
