A Budget For Growth And Transparency

Prof N.K. Singh

Former Chairman International Airports Authority of India

The budget presented in the parliament is one of the best budgets presented since 2011. It does not bring radial and epoch making reforms but it certainly makes a determined effort for the growth and transparency in the economy of the country. Main criticism of many pro-reforms lobby is based on their disappointment on the lack of sweeping reforms of a bold budget. It is true that such reforms have not been brought in but the ground has been prepared for many more unshackling reforms in coming budgets. Lot of commentators have used fashionable phrase of budget being good for not doing many things that could be negative features and keeping on track of the positive aspects.

I will mention five major highlights of changes brought in features that will make the budget pro-growth. First of all, the major concern of retarded growth of economy due to demonetisation has been tackled with growth pegged around 6.7%. It is considered a cautious estimation by the government whereas some scholars put it around 7%. The outcry of losing 2% or more will certainly be belied. Also farmers’ welfare measures have ensured that there is growth of 4.5% in crop sowing which is highest so far despite demonetisation which was anticipated by critics to hit the growth.

Second major strength of the budget is its clear emphasis on transparency by bringing informal sector to formal economy. Digital economy will certainly usher in more clean business than ever before. Steps to check political funding, the main source of black transactions, have been nailed with limit of cash funding brought from Rs. 20,000 to only Rs. 2,000 and rest of the donations by bank transfer. It is a bold step to make political field clean in economy.

Third major feature of the budget pertains to the thrust on capital expenditure which will go up to 20% and funds for infrastructure, roads, rail and housing etc. This is bound to create more jobs and development. Railway safety fund and upgrading of services along with roads network are definitely a major step to boost investment and manufacturing. The foreign direct investment is an essential ingredient of creating jobs and growth. Abolition of Foreign Investment Board is a welcome step which is likely to quicken the pace and remove delays.

Fourth feature pertains to tax reforms. Reduction of tax for industry or enterprise below 50 crores is bound to boost job creation and help the medium industry although even bigger enterprises also could have been given some concession. Concession for personal taxation and simplification of procedure will ease the lives of common man.

Fifthly, Major boost is given to farmers and rural economy by not only enhancing MNREGA budget but also by making it leakage free though linking Aadhar card with bank transactions. This too will reduce corruption as money will directly reach the personal accounts. Above all, there is nothing free and even MNREGA is lined to development of irrigation facilties which is bound to increase the production.

No wonder even foreign press, which is generally critical of Modi government, has given a thumbs up to the budget. The Wall Street Journal calls the budget as ‘Pretty good’. The Washington Post has commented it positively. With reduction of deficit from 3.5 to 3.2, India will gain in rating agencies estimate.  No doubt, a lot more could have been done but one has to understand the political reality and fact that five states are undergoing election process and any benefit to attract voters would have been a problem. Again no major disinvestment is envisaged although it would be done in parts in many corporations which need more aggressive selling. Public enterprise need to focus on core areas where it is needed rather than squandering money of taxpayer as Air India is doing when a number of airlines exist in the country who are competing fiercely.

Similarly, legislative changes in scrapping labour laws which are impeding development of the industry need to be checked. More than hundreds of laws which were obsolete have already been removed from the statute book. Perhaps there will be time to reform legal and government functioning to make it effective for the users. Overall the budget has laid a road map of growth and development with stability and balance.

Bus Stand

First Passenger: “Why every conductor on Himachal’s bus says he is from Nagrota Bagwan”?

Second Passenger: “They have a Conductor University there”.

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