oppn parties Union Budget: Neither Here, Nor There

News Snippets

  • Maratha quota bill likely to be tabled in Maharashtra assembly today
  • Arvind Kejriwal skips ED summons for the 6th time, says the case is in court and will follow court's decision
  • PM Modi says UP has gone from 'red tape' to 'red carpet' in 7 years of 'double engine' government
  • Farm unions reject government offers, to resume Delhi march from today
  • Centre says some Aadhar cards in Bengal 'deactivated' due to technical glitz, will be activated back soon
  • Supreme Court stays LS privilege panel summons to Bengal officials over BJP MP Sukanta Majumdar injury case
  • Supreme Court junks Sandeshkhali petition, says it cannot be compared to Manipur, asks petitioner to approach Calcutta HC
  • Supreme Court gets tough on Chandigarh mayoral elections, asks for ballot papers and video footage, does not order re-election
  • Government starts withdrawing old small tax demands, up to Rs 25000 per entry till FY 2009-10 and up to Rs 10000 per entry from FY 2010-11 to FY 2014-15 with an overall ceiling of Rs 1 lakh per tax payer
  • Stocks remained positive on Monday: Sensex gained 281 points to 72708 and Nifty 81 points to 22122
  • Jasprit Bumrah likely to be rested for 4th Test while K L Rahul may be back
  • FIH Pro League hockey: India beat Spain 8-7 in shootout
  • SP leader Salim Sherwani, miffed at no Muslim candidate given RS ticket, quits party
  • Army going for big (Rs 57000cr) upgrade in combat vehicles to replace T-72 tanks
  • Mamata Banerjee says the BJP is doing nothing to resolve the Sandeshkhali dispute but instead fanning the fires to escalate it
History created in Supreme Court as Chandigarh mayoral poll ballots counted in court, judges declare AAP candidate Kuldeep Kumar winner after taking into account the votes defaced by returning officer Anil Masih
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Union Budget: Neither Here, Nor There

By Sunil Garodia
First publised on 2018-02-02 19:56:37

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
As expected, the union Budget this year was a political statement but a bad one. The BJP forgot that the middle class has always been its staunchest supporter. Yet, the budget completely ignored it. Apart from that, the government has failed to spell out how it is going to finance the grandiose schemes it has announced in the budget. Hoping for tax collections to improve and more people to come under the tax net and hoping to finance the welfare schemes from that money is hoping too much.

On paper, the budget will give the necessary push needed to the economy. Massive investments are envisaged in the infrastructure sector. If all of them fructify, hundreds of thousands of jobs will be created and companies that provide materials to this sector, viz. cement, steel, pipes, bricks etc will see booming business. But all this can only happen if the finance minister can raise additional funds. Where is the money?

The health insurance scheme announced for 10 crore families (or 50 crore people, assuming 5 members per family) is truly majestic in its sweep. It will easily be the worldÂ’s most comprehensive government-funded health care scheme. Reports suggest that the premium will come to around Rs 1100 per year. That translates to Rs 11000 crore for covering the entire 10 crore families. Again, where is the money? The finance minister was at his ambiguous best when he said that "adequate funds will be provided for smooth implementation of this program." He did not think it fit to say how and when.

The farm sector does get benefits, but again these will happen only if the schemes announced are implemented. Further, there is a huge risk of runaway food inflation if minimum support price is enhanced too much. Instead, the decision to set up integrated marketing centres for farm produce is better. The government must ensure that there are not too many middlemen in the farm supply chain as they are the ones who corner the profits with the farmer not getting his due.

The prime minister had ranted against protectionism at Davos. Yet, in this budget customs duty on more than 100 products has been increased to protect domestic producers. Granted that it will bring in revenue too but setting up trade barriers is not the way to earn revenue.

If the finance minister is able to improve tax collection and finance the schemes, all will be good. But if indulges in financial profligacy and resorts to borrowing throwing fiscal deficit targets to the wind, it will spell doom for the economy in general and the financial services sector in particular. The NDA government has shown exemplary fiscal discipline in its first three years. One hopes that the trend will continue. As The Telegraph daily put it in its sub-headline, this budget tries to appease all but pleases none.