If everything that the stand-in finance minister, Mr Piyush Goyal, announced in Parliament in this pre-ballot budget came to pass, India would really be a haven for its citizens and the chants of “Modi, Modi, Modi” that interrupted the budget would be well merited. Unfortunately, what Mr. Goyal tom-tommed as his achievements may well have been an itemized account of the failed promises of the government and the opposition must be complimented for not having interrupted the speech. What Mr. Goyal must be complimented for is in having addressed every political constituency, save the youth that found nothing for itself on the job front. As for the others, farmers (minuscule though the per capita benefit is), women, armed forces, start-ups and the small tax payer, pension for the unorganized sector, everyone had something to take home, the Rs 5 lakh tax threshold being a particular hit with the members of the ruling party. Hopefully, this will provide a stimulus by way of putting some spending money with the middle class that may help stir things up for the economy. When it comes to brass tacks, it was generally appreciated that the numbers would not add up to a 3.3 per cent fiscal deficit, as a percentage of the gross domestic product, and one would have expected the minister to be more apologetic for having failed to respect the commitment under the Fiscal Responsibility and Budget Management Act, 2003.
Numbers, critical though they are, were not supposed to matter in this budget that was to serve as a manifesto, and to impact the fortunes of the ruling party that suffered reverses in recent state elections. Clearly, the government could not have come out with a state of economy report that would have too much of red ink to show and the minister’s claims of ushering in an era of “transparency” can only attract derision.
The only thing going for the government was the falling food inflation ~ in the Minister’s words, the government broke inflation’s back ~ that may have kept the general population happy but at the cost of upsetting the entire farming populace ~ whose backs the government broke ~ that is at its wits end on how to get improved farmgate prices. The allocations for the farming sector become meaningless given the nature and intensity of the problem.
The fiscal deficit target has been missed, probably by a long shot, which only detailed analysis of the numbers over the next few days will reveal and the statement about India’s current account deficit having been brought down to 2.5 per cent needs to be examined closely because the deficit widened sharply to 2.9 per cent of GDP in July-September 2018-19 from 1.1 per cent of GDP, in the same period of the previous fiscal year. Too many items have been pushed out of the budget calculation for a fair appraisal of finances but one does not expect any better from a government that talks transparency and delivers haze.