The interim budget has turned out to be a three-way play—a bugle to amplify the achievements of the government; a broad statement of growth policies it expects to pursue; and a tightening of purse strings to cut the fiscal deficit from 5.8 per cent to 5.1 per cent. The sharp prudence surprised many as Finance Minister Nirmala Sitharaman firmly declared that she intended to meet the deficit target of 4.5% in another two years. Her tight, under-an-hour budget speech dwelt expansively on past performance—tackling poverty with schemes ranging from the direct transfer of Rs 34 lakh crore to the wallets of 80 crore Indians, to providing loans to 78 lakh street vendors.
The interim budget was also cleverly used to signal that the coming Lok Sabha polls are but a formality; and that the incumbent government intends to continue its aggressive capital expenditure policies helmed by infrastructure projects. The capex target for the next fiscal has been raised by 11.1 percent to Rs 11.11 lakh crore. But the big revelation was that a whopping Rs 50,000 crore of last year’s capex went unspent mainly because of states not meeting their targets. Or, is that a euphemism to say the opposition states were denied their dues? Meanwhile, the finance minister indicated that housing is going to be a future mainstay, with 2 crore rural housing units in the pipeline, while slums, chawls and unauthorised colonies can expect to be recognised and upgraded.
There were parts which resembled an election speech, like the underlining that the four ‘castes’ the government was budgeting for: the poor, women, youth and annadata or farmers. However, it must be conceded there were real sops too, not expected from an interim budget: a national vaccination programme for cervical cancer and medical cover for all ASHA and Anganwadi workers. The government said the tax regime will remain unchanged but threw in the sweetener that it intends to waive the backlog of small-but-irritating income tax demands up to Rs 25,000 hanging since 1962. What seems to be a big miss is the failure to recognise and provision for growing rural distress. Rural India has faced a steady decline in income, and it is seriously impacting consumer goods sales. In this scenario, the expected push to enlarge employment and wages has disappointingly gone abegging.