Promises ride on prayers
The main challenges we face today are to constrain inflation, particularly food inflation, moderate fiscal deficit to low inflationary expectations, deal with corruption and promote growth while improving the welfare of aam aadmi and aam aurat. One Budget cannot deal with all these issues. However, a Budget is an opportunity to provide a roadmap of how the government plans to deal with them.
From this point of view I look at finance minister Pranab Mukherjee’s Budget 2011 and find it somewhat disappointing as I thought the climate is right to take some major new initiatives.
Mr Mukherjee has promised lower fiscal deficit, but given that there is no net change in tax rates and there won’t be any 3G auction windfall next year, how is this going to be realised? His promise is based on the expectation of 55 per cent increase in gross tax revenue. This may be too optimistic.
These are no specific measures to contain food prices in the short run excepting a prayer to Indra Dev for timely and plentiful rains. No reforms of the Agricultural Produce Marketing Act has been proposed — without this the differences in the price of a commodity across markets and between retail and wholesale market will be difficult to bring down.
While corruption was mentioned, no measures were suggested. We were asked to wait for a committee report.
Mr Mukherjee’s Budget does indeed have lots of measures for aam aadmi. Indexing Mahatma Gandhi National Rural Employment Guarantee Scheme wages to inflation, pre-matric scholarships for SC-ST students, higher wages for Anganwadi workers, extending health insurance to many poor workers, credit write off for handloom workers, etc. are certainly good measures, provided, of course, they are effectively implemented.
The announcement to deliver fertilisers, kerosene and LPG subsidy through cash transfers is also welcome. However, I would have preferred providing entitlements through smart cards with which commodities can be purchased from any dealer.
In summary, the finance minister has played to the gallery but missed the opportunity for substantive initiatives for which the current climate is right.
Kirit S. Parikh is chairman, Integrated Research and Action for Development