Budget 2019 & Indian Economy: Random Thoughts
Morality of Interim Budget?
As per convention the government should have presented only a ‘vote of account’ and not an interim budget because Modi government’s tenure ends on 26 May 2019. Thus from 01 Apr to 26 May is a period of less than two months. Is it morally correct to do so? I request answers from readers of the blog.
No Economic Survey Report?
Presentation of budget is conventionally preceded by presentation of the ‘Economic Survey Report’, which gives an annual review of the state of the economy. This was not done this time. Why this convention has been ignored I request my readers to answer.
Fiscal Deficit 3.4% of GDP: Is Modi Fudging Data?
Modi is the least credible PM in Indian history. His government has, however, succeeded in keeping fiscal deficit and inflation under control till date. This is commendable. The fiscal deficit target of 3.3% is expected to be exceeded by 0.1% which is not bad. The question is that is it the truth & what will happen in 2019-20? Please read this report & form your own opinion:
Major Figures (In Rs lac crore)
India’s GDP (approximately) 175
FY20 expenditure target 27.84
FY20 capital expenditure target 3.36
|FY20 Gross Market Borrowing target||7.1|
|FY20 Gilt Repayment target||2.36|
|FY 19 fiscal deficit 3.4 percent of GDP|
FY20 fiscal deficit target set at 3.4 percent of GDP
FY 20 CAD: 2.5 percent of GDP
MGNREGA: Accepting Economic Policy Failure?
Modi had stated in Parliament that MGNREGA was a reflection of 60 years of Congress failure. Listen to this speech:
Allocation of Rs 60,000 crore in 2019-20 indicates accepting failure of his economic policies and accepting that MNREGA was a good idea.
- Farmers: Farmers with less than two hectares to be offered Rs 6,000 per year as direct transfer. The benefit will be transferred directly into the bank account of beneficiary farmers in three instalments of Rs 2,000 each. Around 12 crore farmers to benefit from the scheme. This scheme will cost the government around Rs 75,000 crore. How much Rs 500/- per month per family will benefit I will leave it for the readers to think and comment.
- Workers: (Good Policy)
- – Monthly pension of Rs 3,000 for workers in the unorganised sector to be paid out after retirement. Pension scheme to benefit 10 crore workers in the unorganised sector. Those who join at 18 years of age will have to contribute a mere Rs 55 per month. The government will contribute equal matching share in the pension account. This scheme will cost the government Rs 500 crore.
- Employees’ State Insurance eligibility cover limit has been raised to Rs 21,000 per month from Rs 15,000 per month.
- Gratuity limit increased from Rs 10 lakh to Rs 30 lakh.
- Workers who suffer grievous injuries will now receive Rs 6 lakh from Rs 2.5 lakh through Employee Provident Fund Organisation (EPFO).
- Unemployment: That the budget did not talk about the problem of unemployment is a highlight!
Thoughts for Readers on Indian Economy
- There is acute distress being suffered by farmers.
- There is serious problem of unemployment, under-employment and disguised unemployment in the rural economy.
- Over 20 percent of the population is below poverty line.
- Politicians and their families are getting richer at an extremely fast rate, be it Robert Vadra or Amit Shah’s son.
- The election expenditure is rising at a fast rate (mostly black money).
Why can’t we elect someone like Raghuram Rajan as our PM for 10 years who can select his team of advisers and genuinely improve our economic condition like Deng Tsiao- Peng did for China? Are we collectively so incompetent and so corrupt that we have to keep suffering corrupt, incompetent and liars as our political masters?