The budget is not a magic wand that can be used to wish away three-and-a-half years of gross economic mismanagement by the government. At best, the budget expenditure and account statement has been transformed into an opportunity for the Finance Minister to grandstand on issues from motherhood to apple pie.
The claim of 7.5 per cent GDP growth is at best an accounting sophistry and does not take into account the fact that real growth is only 5 to 5.5 per cent. With 2004-05 as the base year, the BJP government inherited an economy strong on fundamentals despite the great meltdown of 2008 and the Eurozone crisis of 2011. In contrast, the average 7.8 per cent growth with 2004-05 as the base year during the UPA regime translates to 9.8 per cent with the revised base year. In real terms, the growth of the economy came down by 2 to 2.5 per cent during BJP rule.
The government has chosen to ignore demonetisation and the badly implemented GST that demolished the informal sector, which comprises 91 per cent of the population. The claim of 70 lakh formal sector jobs over the past three-and-a-half years has been contested by economists as complete fantasy. It is clear that the government woke up late in realising the huge agrarian distress after serving the capitalists, oligarchs and the khaas aadmi, and is now paying lip service to the majority of the 1.25 billion population that constitutes the bulk of the electorate.
The budget attempts to rehash former US President Barack Obama’s Obamacare by introducing a new health scheme, but we need to go through the fine print to see the entry level and ascertain if it actually covers 10 crore poor families as claimed.
The decision on merging public sector companies in the insurance sector is a precursor to an ill-conceived disinvestment plan. The proposed privatisation of Air India does not reveal the methodology to value a Rs 5 lakh crore company.
While there is no relief to salaried professionals and small businessmen, it is unfortunate to provide relief in corporate tax to companies with over Rs 250 crore turnover.
The author is a Congress leader and former Union Minister