How will one put Finance Minister Arun Jaitley’s latest annual budget presented in the Lok Sabha on Thursday in a nutshell? It has some unprecedented bold steps like the launch of health insurance cover for 10 crore families which is about 50 crore people, It has some great ideas about reviving the farm and rural economy but it leaves too much dependence on implementation to be done of all this in the coming months and years! So from a farmer or small trader’s point of view, this budget seems like a hefty cheque which is post-dated.
One of the panellist participating in a discussion on a national channel on Thursday afternoon said; “These are great ideas by the Finance Minister and his intentions seem very good, but what if most of it does not get implemented by the bureaucracy and system”? That in essence is what the budget this year is. It puts a lot of stress on agricultural sector and rural development, but these are areas where implementation of projects and new ideas has remained a challenge for about five decades.
There are some good ideas in the budget. Giving standard deduction benefit to 2.5 crore people is a good step and expansion of road network by about 3 lakh kilometres is another positive step. But the salaried middle and higher middle class should have been given some relief in direct taxes. The economy is currently going through a bottom out effect. Tax collections are growing. Number of people filing tax returns has been steadily growing and Goods and Services Tax (GST) collections is growing at about 12% and markets including Mumbai Sensex figures are at an all-time high. But the condition of agriculture in almost every state in India remains a huge challenge and so does the area of social and economic disparity.
The economy should grow between 7 per cent and 7.5 per cent in the next fiscal year starting April 1, 2018, with exports and private investment set to rebound, the Economic Survey says. Finance Minister Arun Jaitley tabled the survey, the annual report card of the country's financial health, in Parliament on Monday as the Budget session began.
The Economic Survey sees GDP growth at 6.75 per cent in the current fiscal year, ending March 31, 2018. It says a series of major reforms undertaken over the past year will allow real GDP growth to rise to between 7.0 per cent and 7.5 per cent in 2018-19, thereby reinstating India as the world's fastest growing major economy. However the challenge of NPAs in public sector banks and bad loans remains unresolved. The other issue is of unemployment which remains undiscussed in this budget. There are many questions being asked about how exactly the government will implement the ambitious health insurance scheme. Perhaps details will be rolled out soon.
The International Monetary Fund (IMF) projects the Indian economy to grow at 7.4 per cent in 2018, which will make it the fastest growing country among emerging economies. The IMF has also projected a growth rate of 7.8 per cent for India in 2019.
The economic survey earlier had flagged risks from rising oil prices. "Some of the factors could have dampening effect on GDP growth in the coming year viz. the possibility of an increase in crude oil prices in the international market," it said. But the government has gone ahead with adding the education and health cess on fuel after providing marginal relief in central excise on petrol and diesel. Tax on several items right from imported mobile phones to LED, LCD screens has been hiked. The general fear is of inflation getting out of control.
Clearly the government has many challenges to face in an election year. How many of the welfare schemes will actually make an impact on the ground in rural areas and how soon is unclear, as former finance minister P Chidambaram said, merely 10 ministers repeatedly saying the budget has focussed on agriculture and rural development is not enough anymore. The results have to be seen on the ground.