The
excitement and the frenzied analysis of the much talked about budget is over. The
customary plaudits from the supporters and the brickbats from the opposition in
the first few hours is also over.
The
Congress allegations of “jumla” have been discussed threadbare in the national
media. Some farmers have expressed their discontent. The proverbial “middle
class” has said they are unhappy. And the corporate world has expressed their
disappointment over being “forgotten” by the Finance Minister.
One
day has passed and it is time for us to take stock of the budget proposals
dispassionately, after taking a deep breath and leaving aside all our emotions.
The
founder of Singapore, Mr Lee Kuan Yew had stated in his first speech to the
Singapore Parliament in August 1965 that he wanted Singaporeans to remember two
things as they started their journey as an independent Nation. His first
message to the newly elected Parliamentarians was that the World did not owe
Singaporeans a living. His second message was that the planning for their
generation, for better or for worse, had already been done and that the
parliamentarians needed to think of planning for the next generation of
Singaporeans.
Keeping
these two thoughts at the back of our mind, let us examine the budget presented
by our Finance Minister.
Understandably
the middle class is upset because they feel they have been left out. The
wealthy and the entitled are upset because they have not got a reduction in
their income taxes. But it is time for this constituency to sit back and
acknowledge that they are where they are because previous finance ministers
have thought of them. Yes, they can always hope for “more and more” but in a
country with such significant income disparities, they need to stop grudging
incentives for the very poor and forgotten members of our country. The
corporate world needs to go beyond the stipulated Corporate Social
Responsibility if they are to see long term and sustainable growth in India.
The
Government, over the past few years has made very courageous moves by
implementing structural reforms through the introduction of Demonetisation,
Goods and Services Tax and the Bankruptcy Code. The short term problems faced
because of these reforms will benefit our economy for many years to come. The
fiscal deficit in this budget is being contained at 3.3% showing a strong
leaning towards financial prudence in the run up to the elections.
Let
us look at the significant budget proposals, both positive and not so positive,
that affect the masses in our country.
1. Health
Insurance Scheme – The announcement of the world’s
largest health insurance scheme will benefit 10 crore households or 50 crore
people. When one realises that this number is 40% of the country, the magnitude
of the proposal sinks in. This will truly benefit the common man. Implementation
of anything of this magnitude will take time and will have some glitches but as
long as the intent and direction are clear, the critics can be conveniently
ignored.
2. Crop
Procurement Price – The budget has
proposed a 1.5 times increase in the procurement prices of crops which will
immediately put more money in the hands of the farmers. This is very
significant coming on the back of a consistently increasing procurement price
over the past 4 years. This will be augmented with a huge increase in
institutional credit for farmers. Though the farmers expected loan waivers,
this has not been done. Loan waivers are temporary “fix-its” and offer
temporary solutions at a huge cost to the economy.
3. Operation
Green – Taking into account the annual
challenges most of the country faces because of the varying prices of potato,
tomato and onion, this budget has recommended an Operation Green similar to
Operation Flood for milk. Once again, this will help to stabilize the prices of
these staple vegetables in all our diets. The impact will be felt over a period
of time.
4. Housing
for all by 2022 – The budget continues to lay a strong
emphasis on housing for all by 2022, the 75th anniversary of the
Republic. Imagine an India where everyone has a roof over their head.
5. Infrastructure
– The Budget continues to commit more funds to building the much needed
infrastructure all over the country. The poll bound state of Karnataka received
a special mention from the Finance Minister through an enhanced allocation for
the Bangalore Metro.
6. Ujjwala
Scheme – This scheme has given free cooking
gas to over 5 crore women and the budget proposes to increase this number to 8
crore women. We should sit back and think that for a lot of people, gas is
taken for granted and yet such a significant number of our fellow citizens,
dependent on wood and coal fires, are getting the benefits of gas for the first
time post-independence.
7. Swachh
Bharat – After the installation of 6 crore
toilets in the past few years, the budget emphasizes the need to continue this
drive and make an additional 2 crore toilets in the coming year. Once again, we
should think of something as basic as making India open defecation free has not
been available to so many in 7 decades.
8. Long
Term Capital Gains – These have been
re-introduced and the cover the Finance Minister has taken is one of a buoyant
stock market. Buoyancy of stock markets can never be taken for granted but the
long term capital gain is a one way street of paying out cash. This provision needs
to be reconsidered and reversed.
9. Customs
Duty Increase – The proposal to increase customs
duties is definitely a very retrograde and ill-advised step especially for a
country that is pushing for more investments. While this may seem to be a
strong step to support “Make in India”, customs duties are always seen as trade
barriers and frighten away potential investors. Increasing customs duties on
smart phones, the very tool of the masses, while referring to additional
investments in Artificial Intelligence and Block chain is baffling to say the
least.
But
all is not lost for the “middle class” and there is no need for despair. While
this is the last full budget before the next elections, if there is really a
strong degree of distress amongst the middle class, this Government, I am sure,
will make a mid-year course correction offering some additional sops.
If
India is to occupy its rightful place in the comity of nations as the 5th
largest economy, some sacrifices will have to be made by the people who have
“had it all” over the past 7 decades.
In
conclusion, I would also like to remind readers of the inauguration speech of
US President John F Kennedy "ask not what your
country can do for you, ask what you can do
for your country."
*******************
The author is the founder Chairman of
Guardian Pharmacies. A keen political observer, he is an Angel Investor and
Executive Coach. He is the author of 5 best-selling books, Reboot. Reinvent.
Rewire: Managing Retirement in the 21st Century; The Corner Office; An Eye for
an Eye; The Buck Stops Here - Learnings of a #Startup Entrepreneur and The Buck
Stops Here – My Journey from a Manager to an Entrepreneur.
Twitter: @gargashutosh
Instagram: ashutoshgarg56
Blog: ashutoshgargin.wordpress.com |
ashutoshgarg56.blogspot.com
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