As the years have gone by, this government has progressed from being one with a long-term vision to steadily focusing more and more on short-term exigencies. If this were merely an interim budget, dealing only with the latter would have been fine. But it is apparent that this is not an interim budget, but a statement of what path GoI intends to follow in the future.
There was an economic vision in the early years of the Modi government, not very well articulated, but a vision nevertheless. It seemed to say, let us tighten our belts and build a growing, employment-generating and clean economy. That’s, unfortunately, no longer the case. Immediacy has taken over, the vision is consumption not creation, welfare not productivity. Worst of all, it is committing to things that the following government will need to make true .
In its early years, Modi sarkar did try and address issues important for the long term. Using petro product prices to correct UPA-2’s sins was one such example, implementing Jan Dhan and embracing Aadhaar will have far reaching impact, as will the accelerated use of LED lights and project UJJWALA. These efforts were not just giveaways. They required the beneficiary to also take responsibility .
But that has not continued. What we have in this budget is a travesty. Anyone can make claims of greater tax breaks or greater subsidies. Unfortunately, unlike other interim budgets, this one is committing to schemes, tax breaks and subsidies that will achieve be difficult to reverse. There was no need to come up with such a budget and commit to figures that a new government will need to manage.
Whichever government gets the mandate, even if headed by Modi, should dump this budget and start afresh What should the budget be like? A good budget would lay out a sense of vision of where the nation is moving and what is the long-term direction. Employment, water availability and climate change are in this bucket. Next, it should look at the immediate urgencies. Farmer distress, defence preparedness are in this bucket. So that while handouts are given, the longer vision is also made explicit and steps taken in that direction.
The long-term employment problem is intimately connected with the problem of basic education. This problem could have been flagged, as should have the agriculture crisis stemming from the inability of the economy to match production with demand. Rice cultivation in Punjab and Haryana will need to give way to other higher value-added crops if we have to prevent their desertification. What long-term vision is this government thinking of?
Further, the accelerated use of LED lights, ramping up the growth path of renewable energy and the implementation of UJJWALA should have been built upon. The coal cess is a case in point. Arun Jaitley had increased the cess on coal in 2015, ostensibly so that the resources generated could be used for environmental purposes. But nothing of the sort happened. Later, when GST priorities overwhelmed everything else, tens of thousands of crores were transferred. This money could have been used for cleaner coal power, better garbage collection and management, river water-cleaning, protecting marine life. Again, none of that happened.
The coal cess or the funds could have been brought back, a carbon tax regime could have been explored, greater R&D could have been incentivised for electric vehicles. Environmental bonds could have helped access funds for sustainability causes. Sadly, the budget’s ‘non-vision’ tells us that this government is no longer taking responsibility of the environment. Hopefully, we will have a better budget soon.
Source : Economic Times