SAMBALPUR: The Finance Minister has tried to strike a balance between politics and economics. Looking at the political and economic background in which the UPA-II government is functioning, Pranab Mukherjee has made a sweet attempt for survival, said well-known economist Dilip Panda.
The budget is neither a reformist nor a progressive one. Rather the wise Minister has utilised the budget as an economic weapon for survival of the government, he said.
Keeping in view the objectives of containing inflation, sustaining growth rate, achieving fiscal consolidation and attaining inclusive growth, one can comment on the budget. With a fiscal deficit of 5.1 per cent, it may not be possible to maintain stability in containing inflation. Further increase in excise duty and service tax from 10 to 12 per cent may enhance inflationary pressure, he added.
The Finance Minister announced to curtail subsidies by 1.7 per cent of GDP but he has not stated the modus operandi.
If fuel prices rise at global level, and subsidies do not reduce it will fuel further inflation and stagnate growth too, he cautioned.
On the tax front, income tax exemption up to two lakhs is disappointing since it is too less in higher inflation rate.
A Pedestrian Budget...
The budget is highly uninspiring and directionless as there is no concrete proposal to cater to the needs of 70 per cent population living in rural areas. At best, it is a pedestrian budget without any innovative idea to take our country on the path of equitable development, said former Member of Lok Sabha and President of All India University Employees’ Confederation, Bhabani Hota.
The hike in excise duty and service tax by two per cent will hit the middle class and lower middle class, in particular, due to price rise. Moreover, Pranab Mukherjee did not touch irrigation issue even though half of India is drought prone. Allocation to universities was too meagre to have any impact on strengthening higher education system in the country.