Before the current
phase of fairly satisfactory rate of growth
of the Indian economy, it was commonly
described as an economy with a Hindu growth
rate implying the dismally low rate of
growth. To paraphrase this we can call the
budget presented by India’s finance minister
to the parliament as the budget with lower
than Hindu rate of reforms. This is the
dullest budget India has had since the
economic reforms started in 1991. P.
Chidambaram is not PC anymore.
The Budget:
The current budget fundamentally focuses on
what has worked so far. In this it lays
emphasis on two – the Bharat Nirman schemes
and what it calls the flagship schemes.
Under the former emphasis is laid on
irrigation, water supply, electricity and
roads in rural areas. The components of the
later are Sarva Siksha Abhiyan, Mid-day Meal
Scheme, Rajiv Gandhi Drinking Water Mission,
Total Sanitation Campaign, National Rural
Health Mission, Integrated Child Development
Services, National Rural Employment
Guarantee Scheme and Jawaharlal Nehru
National Urban Renewal Mission.
For the country as a whole the Bharat Nirman
schemes would have an enhanced funding of 54
percent. Of these two relatively new schemes
expected to have a broad impact are National
Rural Employment Guarantee Scheme and
Jawaharlal Nehru National Urban Renewal
Mission.
The budget mentions the improved investment
scenario in the country accompanied by a
rising savings rate. It also talks of a
focus on cluster approach in development
strategy.
Regarding education the budget proposes to
raise the status of Punjab Agricultural
University, Ludhiana and the Rajiv Gandhi
Institute of Biotechnology,
Thiruvananthapuram like it did to the Indian
Institute of Science, Bangalore. It also
provides an assistance of Rs. 50 crore each
to the 150 years old universities of Mumbai,
Madras and Calcutta. It equally promises an
additional grant of the same value to these
universities towards the end of the
financial year.
As regards taxes, the budget aims at
promoting demand by the relatively better
off sections of society by lightening the
burden of customs and excise. This implies
that, though the tax structure remains
unchanged, the ultimate financial burden
would get lighten for the consumers in the
relatively higher bracket. Under the new
economic reforms scheme we have been hearing
of disinvestment of the public sector, but
for the first time since 1991 we see in this
budget singing the glory of the public
sector. One may say that this is done under
the influence of the left parties.
North East and Common Man:
What concerns us most is how the budget
portends for the common man and the North
East. There is nothing specifically
significant for the region in the budget.
While the national level expenses for the
Bharat Nirman schemes are rising at the rate
of 54 percent, it would be only 18 percent
for the region. Given the relatively
backward condition of the region, we would
have expected that the rise for the region
would have been much more than the national
average.
The budget,
however, promises a horticultural institute
in Nagaland. Otherwise there is nothing in
the budget specifically meant to boost the
pace of development in the region. Though we
had expected that in the context of India’s
Look East Policy certain measures would come
up to build up the region’s infrastructure
to meet the requirements of global
interactions, the hopes have been belied.
As regards the common men, the budget sends
out the message that they should expect any
benefit whatsoever from the increasing rate
of growth only and not through any budgetary
schemes. The benefits of the schemes
relating to customs and excise would go only
to the better off sections of the
population.
In fine:
In fine this budget is the dullest budget
India has had since 1991. One may try to
blame the Left parties for this. But, given
the present strength of the Indian economy,
Chidambaram could have tried addressing the
issues of regional balance and poverty under
economic reforms head-on. This would have
given the budget innovativeness and advanced
the reforms without inviting any meaningful
opposition.
Secondly,
India has been talking of a knowledge
economy in tune with the global trend. But
there is nothing in the budget which speaks
of application of mind in this regards.
Overall, the budget neither advances the
reform process nor does it endeavor to
correct the weaknesses of the reform
process. It is a budget of neither here nor
there.
*** The
article was written during the earlier part
of 2006 |
