The Finance Minister has presented the Union Budget proposals for the fiscal year 2018-19 on February 1 in the Lok Sabha. The proposals range up to Rs 24,42,213 crore. This is around 12 per cent higher than the previous fiscal. This is also the last annual budget before the next general elections.
The budget will not appeal to the middleclass. It enhanced one per cent as health and education cess as an additional burden. The standard deduction being fixed at Rs 40,000 is not going to have any major impact. The middleclass hoped for an election year budget, which would have brought them substantial relief. They are disappointed. The senior citizens, however, have been given marginal relief in terms of TDS up to Rs 50,000 of interest on income and deduction of Rs 50,000 or in complicated and critical cases, a sum of Rs 1 lakh as medical relief. The budget in its entirety is an election-geared budget. It has held out lofty promises in agriculture, healthcare and education. The budget has “conceived”, but the “delivery” or translation into reality is bound to pose problems at the grassroots level.
The highlights in the announced programmes need to be analysed. It has also to be noticed that no substantial budgetary provision has been made for these programmes of far-reaching consequences. Starting with agriculture, there is a proposal for an allocation of Rs 2,000 crore for agro marketing and related infrastructures. For potato, onion and tomato, there is an operation green fund of a proposed Rs 500 crore. Animal husbandry infrastructure would receive Rs 10,000 crore. Agricultural credit would stand a little more facilitated with the target of 8.5 lakh crore beneficiaries to 11 lakh crore beneficiaries. Fishermen and persons looking after animal husbandry will now be eligible for Kissan credit card. There would be a special programme for Haryana, Punjab and Delhi to tackle the pollution problems coming out of their burning the leftover stubs. There is a proposal for 22,000 village haats to be converted into rural markets with e-commerce facility. There would be 42 ultramodern food parks. The National Bamboo Mission will receive a thrust of Rs 1,290 crore. To cap it all, the minimum support price (MSP) of agricultural products would be a critical minimum of 1.5 times the cost of production. There will be a problem in implementation practically in every sphere. For example, in a vital sector like MSP, the modalities and parameters of computing the cost of production are in an unsettled state and bound to pose problems in implementation arena.
Coming to the sphere of healthcare, under the Ayusman Bharat Programme, 1.5 lakh wellbeing centres shall be established at a cost of Rs 1,200 crore. These 1.5 lakh centres would be in the vicinity of the habitat of the concerned persons. The rural health centres are already under stress. They have lack of manpower, lack of equipments and lack of infrastructural support. Opening of 1.5 lakh more centres will pose a serious administrative problem in providing manpower and infrastructure. There is a ground for disgruntlement in this direction.
In the healthcare sector, a very ambitious programme covering 10 crore families (50 crore individuals) under a medical insurance scheme of Rs 5 lakh per family is dreamt of. The budgetary provision for this is highly inadequate. Similarly, 24 new medical colleges and hospitals would pose a problem of manpower and infrastructure. There is no point in establishing substandard agencies.
In the education sphere, there is a provision of Rs 1 lakh crore; and the emphasis shall be on the digital mode of imparting education; and by 2022, the schools are to have digital boards as the medium of instruction. Talent hunting has been provided for through the Prime Minister Research Fellowship. There is a proposal for Ekalabya Model Schools in every block having at least 20,000 ST population or more than 50 per cent of the population being ST.
The orientation of the budget is popular without being populistic. It has squarely kept the general elections in mind. Under the Soubhagya scheme, four crore families shall receive free electricity. Under the Ujalla scheme, eight crore poor families will get free LPG. Having distributed such goodies, the Finance Minister has turned to enhance the salaries of the President of India, Vice-President and the Governors of States. He has also looked after the interests of the Members of Parliament and envisages every five year rectification dependent on the price index.
Villages, the poor, the youth, the farmers and the senior citizens have received favourable attention. The Finance Minister openly stated that the budget is focused towards farmers and rural economy. MSME has received similar attention in tax reduction. To appease the farmers, an allocation of Rs 62,830 crore has been projected.
Overall, the tax proposals would have an impact on prices of commodities. Certain electronic and capital goods like linear motion guide, etc, will become cheaper. So will solar panels and modules involving use of glass and raw cashew will become cheaper. But a spate of goods will have an enhanced price. In some of them, the enhancement through fiscal adjustment is with the hope of attracting private capital to ‘Make in India’.
In the category, we will find increased prices of mobile phones, cars and motor cycles. The plethora of goods that have an enhanced price are foreign perfumes and toilet spray, radial tyres of trucks and buses, chappals, coloured gem stones, imitation jewellery, smart watch, LCD, LED TV panel, wrist watch, pocket watch and wall clocks, etc. There is bound to be an inflationary trend when the prices of so many basic commodities increase contributing to increase in general price levels.
The major problem that the economy shall face is in terms of formulation and implementation of the nittygritties. No details have yet been worked out for the major announcements. Token provisions have been made, which will not meet the requirements appropriately. The experience of the cropping insurance scheme has not been happy.
It is, therefore, necessary to guard the implementation of the massive health insurance programme. Presently, nothing can be worked out in proposal terms so as to ensure proper implementation and realisation to the benefit of the programme. In fact, allocations for the social sector have in many cases shrunk. There is a mismatch between what is professed and what is practised.
The Government’s inability to give away too many goodies were largely due to its fiscal constraints with this year’s fiscal deficit overshooting the 3.2 per cent of GDP target and likely to touch 3.5 per cent on account of GST-related issues. Instead of a 3-per cent deficit in the coming year, the Centre has settled to target a 3.3-per cent mark, deferring the glide path to 3 per cent to 2020-21. This one is actually similar to the budget unveiled by Jaswant Singh in 2003-04, which talked of improving the ‘lifetime concerns’ of citizens, announced a new health insurance scheme and focussed on housing, education and employment too.
In this myriads of angles, the motivational functioning of the budget would baffle the youths and might leave them searching for a cause. The health programme is a good involvement point, but the youth power is to positively utilise it in the implementation of the budget. Let the youth power be more concerned about the events around them!
(The writer, a Senior Advocate, is a former All India Service officer, a former diplomat, a former editor, a former President of Orissa High Court Bar Association and a former Advocate General of Odisha. jayantdas@hotmail.com)