1.Optimistic Projections Clash with Reality:
Mrs. Nirmala Sitaraman's interim budget promises an innovative and inclusive economic future, yet facts reveal a gap between rhetoric and reality. Startups, 'Make in India,' and GDP growth goals face scrutiny as past trends indicate challenges in employment generation and social welfare measures.
2.Fiscal Discrepancies and Questionable Claims:
The budget claims a doubling of per capita income under Modi, yet falls short of the promised $5 trillion economy. Alleged poverty reduction raises skepticism, with doubts about the methodology and true impact on families in rural areas. Stagnant urban employment, reliance on unremunerated labor, and a shrinking salaried class paint a complex employment scenario.
3.Budget Allocation Raises Eyebrows:
A closer look at the budget's 47 lakh crore reveals 16 lakh crore in borrowings, primarily for debt repayment. Allocations in critical areas like education, health, and rural development witness minimal growth or even decline. Despite a sizable capital expenditure, concerns arise over its impact on employment and consumer demand, highlighting a lack of sustainable growth strategies.
Analysis by Dr. M H Prasad Rao:
Dr. Rao emphasizes the need for a more realistic and consumer-centric budget. The proposed committee on population growth overlooks the demographic dividend potential, urging a stronger focus on skilling the young populace. The absence of a long-term vision for skill development, coupled with a lack of attention to service and manufacturing sectors, raises concerns about India's path to developed status.
Mrs. Nirmala Sitaraman, the Finance Minister has presented her sixth budget in a row. Though this is an interim vote on account budget, it definitely portends what to come in the regular budget 24-25 which Modi is quite confident that his government will present being sure of winning thanks to disintegrating opposition.
Modi described the budget as innovative, inclusive and reflects continuity meaning that it will encourage startups, atmanirbhar make in India based production, GDP boosting, employment generating and poverty elevating budget. These hopefuls are however not borne out by facts in yesteryears which can be characterized by growth without employment, concentration of wealth, cost cutting on social welfare measures evident in the description of social security measures as revdi(sweet freebies)
The budget claimed that the per capita income had doubled during the Modi period. But it is still 40 per cent less than the promised 5 trillion dollar economy by 2022.
The claim that 25 crore people equaling 8 crore families have been brought above the multi dimensional poverty. A person is supposed to be above this level if he can earn 3 dollars per day i.e. 90 dollars per month and 270 dollars per family which in rupee terms Rs.23000. How many families in 6 lakhs plus villages can meet this condition? There is no reliable surveys to prove this and even commonsense cannot approve it. Even this level of monthly income per family given the high food inflation coupled with the condition of highly privatized (read high cost) essentials of education and health cannot be said to substantially raise a family out of poverty.
The surveys however established that there has been stagnation in urban employment and the increase in the rural areas is mostly domestic unremunerated women's labor. The salaried class has been dwindling and whatever the growth is there in employment that is in informal sector with a lot of seasonally volatility and with absolutely no social security cover.
ALSO READ
"BJP Icon LK Advani Gratefully Accepts Bharat Ratna, Reflecting a Lifetime of Service and Ideals"
Of the 47 lakh crore budget, 16 lakh crore are borrowings of which 11 lakh crore are meant for debt repayment promising marginal reduction in overall deficit in actual terms which is hard to accept as the borrowings are higher than the debt repayments and the revenue increase not more than the gap.
The highest allocation of 11 lakh crores for capital expenditure as in the the previous years will fill the coffers of the big corporates and the contractors creating a little employment albeit of temporary nature.
The much tomtommed 1 lakh crore fund for R & D still does not raise the budget allocation even to 1 per cent of the GDP which is 3 per cent in China whose yearly global patents received in cutting edge technology areas is 20 times more than that of ours.
Lack of consumer demand is what is holding back India's growth. This budget does not have anything which can raise this in a sustained manner. Widespread use of machinery in infrastructure development for which huge budget has been allocated will not generate employment and hence will not result in purchasing power of the people.
The promise of fixing solar panels to 1 crore houses is a step in the right direction from the environment point of view. But while this will boost the profits of the companies engaged in solar panel production and generate surplus cheap power which will be used by the industries, the net benefits to households in rural areas will be very minimum as the consumption of electricity in rural India is 70 units per month per family which is less than one third of global average, so much for claims on poverty alleviation and increase in standards of living.
Long ago people looked forward to Nani Palliwala for realistic budget analysis. Nowadays the newspapers and TV channels are filled with eulogies of the budgets by the corporate honchos who know what would be in store for them if they try to be realistic and frank. Even the mighty are seized with fear.
Nobody really cares for the budget as it is phrased in a way that even average educated persons can not understand much less common man.
The new feature of this budget is that it has proposed institution of a committee to study population growth. Already in India, except in 5 states, the total fertility rate is less than the replacement rate of 2.1 per cent per year with Kerala having 1.8. The focus should be on cashing in on the demographic dividend available to India in the form very high populace in the age group of 15 to 25 years through high level skilling which during the last ten years, and even before, received more publicity than concrete attention. Only about 5% of our labor force has undergone any formal skill training compared to 68% in the UK, 75% in Germany, 52% in the US, 80% in Japan, and 96% in South Korea.
Skilled labor force with simultaneous growth in the service and and manufacturing sectors to absorb the skilled hands are sin qua non for getting the country the developed status and there is no adequate budgetary focus on this in this budget much less a long term vision and determination that was evident in the construction of the Ayodhya Temple.
Budgets should simply list the marginal beneficiaries with the quantum of benefits in various fields with factual data not macro level figures which no government does for obvious reasons.
Dr M H Prasad Rao
Post a Comment