At the end of the day, who wins?
So here we are again—promised allocations, unfulfilled promises, tall claims and bombastic populist sentiments. All budgets are the same—50-50 in their perceived impact—and this one is no different.
As a supporter of higher education, I am delighted to see the 24% increase in allocation to education. While most of it goes to primary education and the Sarvashikha Abhiyan, it makes sense to allocate funds to both higher education and vocational training.
What has gone somewhat unheralded by all the commentators and experts is the focus on the National Knowledge Network (NKN), along with funds for research and innovation. The implications are huge. The NKN will connect our universities over a nationwide broadband network. This will have a profound impact on teaching and research in a country where we need a disruptive technological answer to the tremendous need for greater capacity, quality and access.
In one fell swoop, NKN and the distance learning and open courseware running on it will bring high-quality education to the length and breadth of our country from all over the world. It can change the future of education and knowledge creation in this country in the same way telecom has and it is not surprising that it is the brainchild of Sam Pitroda.
Pitroda’s other coup in this budget is the formal announcement of the National Innovation Council and its mandate to improve the quality of innovations in the country. This, coupled with the research grants to various universities, at least suggests a modest effort to recognize that it is about time India sets itself on the road to take its place in the world as a thought leader and innovator.
What is unfortunate is that at Rs 52,000 crore, the allocation to education is woefully inadequate to address the needs of our country and to fully capture its much-touted demographic dividend. In fact, no budgetary allocation will ever be enough and it is high time the finance minister and his counterpart in the ministry of human resource development realized that without increasing high-quality private sector participation in education, millions of our deserving youth will be left in the lurch.
I was hoping there would be something in the budget to encourage private sector participation in education, coupled with all the reforms Kapil Sibal plans to bring. Not only are his reforms stuck, the budget holds out no hope for private players.
In his years as finance minister, P. Chidambaram had attempted to reduce the hype around the budget. His view was that the budget was a statement of the government’s finances and not a policy announcement opportunity. Policy measures were taken through the year and, therefore, the limited interest during the budget was from a tax point of view. This, too, was limited to sectors that felt debilitated by the tax burden, or had enjoyed a sop for too long and were worried that it would be withdrawn. But surprises never cease.
As an entrepreneur, I am disappointed that the government wants me to now deposit service tax whether I have been paid or not. I am already squeezed by my customers who want longer and longer to pay even after the service has been delivered by me.
By shifting the basis of tax collection from cash (previously) to an accrual basis as with central excise duty, the government is essentially transferring it working capital requirements to me. A smart move, but a double whammy for the entrepreneur caught between demanding customers and the authoritarian tax man. This is nothing new, but India has gone beyond this.
Today, a large part of India—private and entrepreneurial— has boomed with no support from (or role of) the government in any substantive measure. Unlike industrialists of the early part of the 20th century, the new wealth creators seek nothing from the powers that be. In fact, they looked to be left alone. But the importance of budget day remains, too, albeit for different reasons. The constructed hype is far greater—remember we now have a gazillion 24x7 channels that have to do their two-penny bit for even a whiff of an event.
There are more business magazines and newspapers than there used to be. They must manufacture content, opinion and ad pages. And then there are banks, accounting firms, rating agencies and independent branded economists—all looking for their time in the sun.
As India gets more and more consumerist, budget day has also become about consumption. TV programmes and accompanying sponsors and advertising, invitation cards for every budget analysis, banqueting and hotel expenses for all the budget events, income-generating opportunities for anchors, moderators, independent economists, and analysts; marketing spends in banks, equity research firms, accounting firms—all looking for an effective, impactful yet differentiated platform.
I am not complaining. As a media entrepreneur, I look forward to budget day as yet another business opportunity, and if it triggers other positives through specific measures, then even more reasons to celebrate.
(Anuradha Das Mathur, founder and director of 9.9 Media, contributed to this story.)