An underwhelming Budget 2018-19
Instead of using the Budget as an opportunity for economic rejuvenation, the Government marketed itself and forgot about working towards its goals
The Finance Minister, Shri Arun Jaitley, while giving his Budget speech used the opportunity to speak in both Hindi and in English. Unfortunately, all this meant was that the country was left disappointed and confused in two languages as opposed to just one. In this column, I will attempt to pen down some of the more disappointing and confusing aspects of the Budget that we have been left with.
Fiscal Deficit: This Government came to power in 2014 and at the time of coming to power the current Government, led by Prime Minister Modi and Jaitley made huge claims of limiting the fiscal deficit despite the “irresponsible” actions of the previous Government. The Government promised that it will limit the fiscal deficit to three per cent of the Gross Domestic Product by 2016-17 at the time of coming to power. It has distinctly failed at achieving this objective. In his speech yesterday, the Finance Minister mentioned that the fiscal deficit was estimated to be 3.5 per cent of the GDP. This is also in the backdrop of global oil prices falling by more than half from the time when the UPA was attempting to balance the Budget.
Instead of focusing on using this golden opportunity, the Government, as is typical, focused on marketing the product and forgot about actually working towards its goals. What has also been disappointing is that the Finance Minister did not explain why the Government has failed to achieve this target despite such a favourable global environment. The Finance Minister stated that the revised fiscal deficit for the year 2018-19 is 3.3 per cent (kindly note that the Government estimated that the fiscal deficit for this year was going to be 3.2 per cent) and while I hope that the Finance Minister will at some point clarify why the Government failed to achieve its well marketed goal but that would mean another year of this Government which is not worth the explanation.
Jobs: The Bharatiya Janata Party (BJP) made another lofty promise. Prime Minister Modi promised to create one crore jobs annually but in reality, the Government has only managed to create about 823,000 jobs and a lot of these jobs are in reality extremely vulnerable forms of employment and do not qualify as a stable, salary earning job that millions of Indians are desperate for.
The Economic Survey for 2017-18 too shows that the Government has clearly failed to tackle the issue of creating jobs for Indians, something that is currently desperately needed. It was hoped that the Finance Minister would use the Budget to provide the country with some hope. Ignoring the fact that the issue of jobs only came up in the 47th minute of the Finance Minister’s speech, it does not fill the heart of Indians with hope when the Finance Minister primarily talks about formalisation of jobs and does not really tackle the issue of creating new jobs.
The Finance Minister has claimed that there are skill enhancing initiatives that the Government hopes will bear dividend like the National Apprenticeship Scheme which the Government hopes will provide training to 50 lakh youth by 2020. I pray that this initiative does not have the same tragic end as the
Smart City initiative which was a popular marketing tool but now seems to be languishing in the backdrop along with other ‘schemes’ and ‘initiatives’ which this Government was marketing with much gusto.
The latest jumla? Let us go back the initial years of this Government when it promised to “develop 100 new cities with the latest technology and infrastructure”. This promise was modified and instead, the Government marketed its ‘smart city’ initiative. All 100 cities under this initiative have been selected but once you rise above the noise and din of the Government’s marketing campaign and start to pay attention, you find that the ground reality is different.
The aim of the Government was to transform 100 cities into ‘smart cities’ by 2022. In reality, the Government last year itself stated that no more than three per cent or 23 projects out of 642 identified under the Smart Cities Mission were completed by February 2017.
Unsurprisingly, this was a jhumla by the BJP Government in power who tend to focus more on announcing schemes and distracting the public with jingles than on actually following through with schemes that will help the common man. In the latest Budget speech, the Finance Minister spoke about the National Health Protection Scheme, which will cover 10 crore poor and vulnerable families and provide coverage of up to five lakh rupees per family per year towards hospital care. The Finance Minister did not specify the amount was that would be provided for implementation of this programme and the Finance Secretary Hasmukh Adhia too said that the funding is currently being worked out. I do not mean to sound very brazen but this sounds a lot like a new jhumla.
The Finance Minister stated this scheme will target 10 crore families with a coverage of up to five lakh rupees per family. This means that if a family avails one lakh rupees under this scheme, the amount of money required to cover this scheme will be Rs 10 lakh crore. This is an astonishing figure. It is not clear who will foot this very heavy bill but assuming that insurance companies will be asked to cover this amount, the premium will be close to Rs 30,000 per family and will require an outlay of greater than two lakh crore rupees each year! These kind of numbers boggle the mind and seem to unfortunately suggest that this Government is primarily concerned with announcing block buster schemes in haste for the purposes of a sound bite but its track record does not seem to inspire any confidence on whether the Government will be actually be able to achieve its goals.
Conclusion: While more and more will be written about the Budget over the coming few weeks and months, we must take this moment to remember what in reality has been achieved by this Government. From Swachh Bharat to Make in India and now the National Health Protection Scheme, the Government has proved over the last few years that despite repeated reminders and warnings, it has decided to wallow and shout from the comfort of their fertile imagination, a place where demonetisation was a total success and where Make in India has created millions of jobs.
Unfortunately though, these delusions have come at the cost of us everyday citizens who have to live in the grim reality that the Government has created for us.
(The writer, Jharkhand PCC president, is a former MP and IPS officer. Views expressed are personal)