BackBudget 2013: A budget unsure of itself
A nation that is losing out on production of goods has nothing to look forward to in this budget
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The budget presented on Thursday is difficult to understand. Most people were anticipating a pro-poor, election-oriented, soft-on-the-take exercise that would seem pretty from far but would eventually crumble inwards after serving its purpose just towards the end of this year. Anticipating a host of lollipops for the poor is not wrong. Yet, what is correct this time though is that this budget is unsure of itself and, therefore, the only person who was mentioned by name (apart from Thiruvalluvar, Vivekananda and Stiglitz for quotes) was Azim Premji. His contribution to charity notwithstanding, Premji, as a super-rich Indian, deserves better then being hoisted as a singular role model that needs to be emulated by the other rich and famous of this nation. While countries in Europe, like France, have gone ahead and taxed the super rich heavily, finance minister P. Chidambaram cajoles those who have never wanted to part with their wealth.
If the buoyant morning markets crashed in the afternoon, the reason may not be that there were no sops for the investors. Rather, the causes could be far more sinister and frightening than most people are capable of putting a finger on right now but their gut feeling gives them the unease, and justifiably so.
While agriculture has notched up exports worth ₹ 1.38 trillion, the investment in that sector has been a paltry ₹ 27,049 crore. Farm research takes ₹ 3,415 crore out of that kitty without a mention on which direction that research would aim. Similarly, the different schemes also carry away large chunks out of this kitty when their efficacy is highly questionable. This sector demanded much more since, even today, agriculture is the largest employer of rural unorganized India.
If $1 trillion (around ₹ 53.8 trillion today) is earmarked for the infrastructure sector, a chunk could have been kept aside for water resources management that would not only help the farmer but also industries such as power generation. Ambiguity in spelling these out could be seen as a conscious decision aimed at achieving something that is not visible to most citizens.
Anyone who is self-driven in India (as opposed to having a driver, a red beacon and a pilot vehicle as our ministers do) knows well how unsafe and driver unfriendly these roads are. Yet, we are told that our road construction system, according to this budget, has supposedly “matured". Therefore, while on one hand, it was said that regulations would be done away with to attract investors, the government has decided to constitute a new regulatory authority for the road sector. Could they not have had the National Highways Authority of India’s terms tweaked to handle additional responsibilities, given that this body already has a mass of experience throughout the country? Let us try to guess the reasons for this action.
Supposedly, Kashmir bothers this nation. It has been decided to invest ₹ 1,840 crore for construction of a transmission system to connect Srinagar with Leh and thereby with the northern power grid. The sincerity or rather the lack of it, is glaringly visible when seen in the backdrop of the initial allocation, which is only ₹ 226 crore. At this rate of investment, that project will probably take more than five years. By that time, the cost escalation would, most likely, be stupendous and the government of the day would probably back out. So, what is it that this budget wants to achieve is a question we need to ponder over.
A nation that is losing out on production of goods has nothing to look forward to in this budget. Claiming to extend support to foreign trade policy that will lead to exports of goods and services will barely bolster the present rapid degradation taking place in our exports sector. Without clear financial direction, no policy works anywhere.
A special bank dedicated for women entrepreneurs is a welcome idea. We have to wait and see how the bank will fare when the idea of women’s police stations has not shown much success across the nation.
When most other countries are racing ahead in the field of renewable energy, this budget has reintroduced generation-based incentive by setting aside only ₹ 800 crore for harnessing wind energy. Compare this with the setting up of, say, a low-tech Chinese super-critical thermal plant that costs nothing less than ₹ 3,000 crore for less than 2000MW capacity. Good beginning.
Finally, the part where, to mark the centenary of the Ghadar Movement, this budget says our government will fund the conversion of a memorial to a museum and library at, take a breath, San Francisco. Awesome. Aap ka paisa aap ke haath (your money in your hand) is valid not for Indians, maybe.
The finance minister would probably want us to wish away the Left-wing extremism threat. While he wants to securitize the investor, he is more than willing to deduct tax on compensation paid to land losers in mega projects. This budget seems not political but sinister.
Tathagata Satapathy is a BJD leader and Lok Sabha MP from Dhenkanal, Orissa
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