Opinion by Dr Amir Ullah Khan
Nirmala Sitharaman, country’s first full-time finance minister delivered one of the longest budget speeches (2 hrs 17min)
What’s positive in the budget?
Study in India: 2019 Budget allocates (a meager)400 crores for world-class higher education institutions. The objective of having more foreign students in India to study would not limit only to providing infrastructure. There are other areas that would need change and improvement. Visa schemes needs rethinking and India needs to ensure that law and order is in place making the country safe and trust worthy for foreign students, who will not understand laws and vigilante groups enforcing archaic food habits in the name of religion. The growing number of hate crimes don’t encourage foreigners to choose India for education.
Easy of doing business for Farmers: One more positive highlight is that the budget 2019 is looking at rural economy and it’s development and talks of the Ease of Doing Business for farmers and an ease of living. However, the strategies for implementation are not spelt out.
National Research Foundation (NRF): NRF to be set up through an Act of Parliament, as an autonomous body of the Government of India to fund, mentor, Incentivize and build capacity for quality research across the country disciplines. However, this can be productive if it is not set up to further the Rashtriya Swayamsevak Sangh (RSS) agenda. If funding is only reserved for encouraging cow based products and some exotic practices, this measure will be just old wine in another bottle.
Loan under 59 minutes for Small Medium Enterprises (SMEs) is the FMs way of acknowledging problems that businesses face. This 59 minute time frame has no any meaning and is a good old slogan
There is nothing for Farmers in the 2019 Budget. Except a vague ambition to move towards an untested zero budget farming that talks of replacing fertilizer and pesticides with cow urine and jaggery.
What’s negative in the budget?
a. The centre will make a model law on tenancy and push it on states
b. The New Education policy will be enforced on all state governments and their higher education institutions.
c. Women? After a long speech highlighting the Nari (women), Finance Minister says self-help group workers with Jan Dhan accounts will get overdraft of 5000 rupees and one of them will get a Rs 1 lakh loan. This is what women voters get from this patriarchal Government, which will continue to promote the triple talaq law as it's biggest pro women focus.
External Source of Funding: We will borrow more from external sources. Where the rupee is already at 70 to a dollar, this will further increase our current account deficit
TV channel for Start-ups: Government proposing starting an exclusive TV channel for start-ups. There is no indication on what has happened so far to the 2015 DD Kisan Channel. Now a new TV channel for startups. How does this help?
Surcharge for those earning more than 2 crores and a further surcharge for earning more than 5 crores.
Import duty on gold: The increase in import duty has no logical basis. A 12.4 percent duty now will again give a huge incentive and a large margin to gold sugglera who went out of business when gold duties were slashed 25 years ago.
The Vague statements!
a. Farmers are again told about value added farming that no one understands. Not even the Niti Aayog.
b. Inexplicable increase in import duties on books. A duty hike on cashews and on marble tiles. Harking back to the old days of arbitrary changes in levels of protectionism and on select goods that were meant to help cronies of the ruling party.
c. Will FDI be eased in single brand retail, aviation, media? No clear answer
d. The middle class again gets a home loan benefit. Key constituency addressed with a lollipop.
e. A 2% penalty for those withdrawing more than a crore in one year
Overall this is a budget that does what the Modi Government has been doing all along. There is always attempt to centralise every decision. The examples are the decisions on higher education, on labour laws and on tenancy, all of whom are state issues and do not necessarily fall under the central jurisdiction.
The other clear attempt is to keep the numbers vague. There are no allocations spelt out, so it is very difficult to say if policies and schemes have got adequate funds to be implemented well. For example, despite all the big talk on drinking water, the allocation to the ministry of drinking water and sanitation has been chopped down by nearly 3000 crores.
What is however the most pernicious issue is the habit the NDA government has developed of castigating who dissent as being criminal. For example the 2 percent TDS on cash withdrawals of one crore rupees. This step presupposes that everyone who deals in cash is a criminal. For a vast number of people dealing with the huge unorganised workforce, there is no choice but to distribute salaries in cash. They now have to pay a steep price for working in rural areas that do not have banking infrastructure.
The Modi formula is writ large once again. Speak for the farmers and the poor but something for these sectors. Make noises about skilling and education. Keep the fiscal deficit low and continue a tough stance against inflation. Don’t worry at all about job creation. If the farmers and the youth protest, let us give them a good dose of nationalism. It always works well.
Dr Amir Ullah Khan is an economist and director of POLEDU LEARNING FOUNDATION