Revised : Union Budget a damp squib

The Aam Aadmi Party terms the first Union Budget of the BJP-led NDA government as a damp squib. The party feels that the Budget presented by the Finance Minister, Mr Arun Jaitley has disappointed the Aam Aadmi who had great expectations from the Modi government, especially on the issues of price rise and job creation.  On these two issues the budget offers nothing.

People had expected some concrete and long term steps from the government in the direction of curbing price rise and generating job opportunities. Apart from this, the budget also does not spell out government’s plan to deal with impending drought when the agriculture sector is facing acute stagnation.

The Aam Aadmi Party wants to remind the Finance Minister that his party had promised to the people a slew of measures to curb price rise and inflation. These measures included setting up of special courts to stop hoarding and black marketing, but it did not find mention in the Union Budget presented today.

Apart from saying that the government has enough food grains to deal with poor monsoon, no contingency plan has been revealed in the budget.

At a time, when we are faced and with unprecedented levels of inflation, with the prices of potatoes, onions, LPG, Diesel, Petrol and sugar undergoing a steady and steep rise. A poor monsoon staring at us, people had expected concrete steps and not just lip service on the issue of price rise and job creation.

What worries the Aam Aadmi Party the most is the fact that the budget offers nothing to the cross section of people which will fill the youth of the country with frustration, which had expected a miracle from the Modi government.

The Union Budget suggests that the government is too excited about FDI, PPP and Airport and Highways. Government’s over enthusiasm for FDI is such that it has compromised its long standing position on the issue of FDI in Defence and has raised the FDI limit in the crucial sector to 49%. Similarly, the BJP, which vehemently opposed FDI in Insurance during UPA regime, has raised FDI limit in this sector to 49 per cent in this sensitive sector. Aam Aadmi Party feels that the government’s over enthusiasm for airports and highways is only because there is huge scope of corruption in these two infrastructure sectors, because despite a lot of lip service about curbing corruption in their manifesto, the BJP led government did not announce any steps in the Budget.

The unfortunate part is that the government has complete ignored the crisis in the agriculture sector. This crucial sector needed immediate intervention of the government on priority, especially in wake of the poor monsoon staring at us, but the sector found only cursory mention and token outlay. There is no mention of new MSP formula or any other concrete step to take the sector out of acute distress.

While this budget attempts to touch almost every aspect of life in India, it is cursory in its approach and rather shallow with its details.

Another area of concern is the usage of disinvestment in the coming year to fund a lot of these projects, where they seek to raise about 60,000 crores. While the Aam Aadmi Party is not opposed to disinvestment in principle, we must ensure that the government doesn’t use it as a regular source of income to plug deficits. Asset sale is not revenue, and will not plug your fiscal deficit, in the long run. Another point to remember is that the methodology to arrive at a disinvestment is rigorous and carefully studied.

Much like previous budgets, there is a lack of transparency in data. Yet again, despite being in a low growth economy, the revenue projections are optimistic while expenditure ones are pessimistic. There is a lack of transparency in data and its accounting. For example, expenditure done by the government as part of flagship schemes like MNREGA are currently shown under the line item of central assistance to states, bloating that number from 1.19 lakh crores to 3.38 lakh crores, which is not a true representation of the Centre or particular state’s fiscal situation, since states have only 10% flexibility on how those funds are used.