In terms of budgetary arithmetic, this has to be the first budget ever in which re-appropriations are more important than appropriations. Indeed, this budget is more significant for revised estimates of last year than for budget estimates of next year. The finance minister spent more time and energy emphasizing the hikes and additional allocations for the current fiscal than the proposed enhancements of allocations for next year. That should tell you the story of this budget!

It is a budget with a unique retrospective component for many new policy announcements, be it income support or proposed social security programmes. This is being done for the first time.

No quarrel with either the method or manner of the pre-election event, except the fact that the massive new provisions made in the revised estimates for current fiscal year cannot be realistically and meaningfully disbursed in the remaining two months, especially with the code of conduct coming into operation sooner than later.

A case in point is the income support for farmers. 20,000 crore has been provided in the current fiscal to be disbursed to 120 million farmers involving 30 state governments! Their identification and then the actual transfer will take place, if at all, long after the din and dust of elections has settled and the verdict of which this is supposed to influence.

The same is true for the additional allocation for MGNREGA in the current year. It will be impossible to generate man days worth 6,000 crore in 60 days. Or pensions of 500 crore (till March) for workers in the unorganized sector. Admittedly, these are the death knell overs, but the asking run rate is too high even for a T20!

Impractical as it might be, it is excellent optics. And certainly a great statement to build slogans on in the impending elections. The difference between “planning" and “having done" will get lost somewhere on the ad copy writers’ desk!

All this should not worry fiscal experts. This is par for course, including the significant direct tax changes which, technically speaking, violate convention. What should cause discomfort is the emerging structure of the budget which has serious implications on rate and structure of macroeconomic growth.

Of the proposed total expenditure of 27.8 trillion in this budget, almost 72% is in the form of transfer payments; be it to the state governments, urban and rural local bodies, corporations and now farmers and unorganized workers. Only 28% is expenditure directly made by the central government. It gets even worse. Out of the remaining 28%, 20% is consumption of the central government on itself. This leaves just 8% of the total expenditure—the lowest ever—for capital expenditure. Almost 45% of this 8%, i.e 3.5% of the total expenditure, are financial investments.

Thus, out of the 27.8 trillion, capital expenditure will not actually be 3 trillion as stated in the budget speech and documents; the physical investment will be just about 1.25 trillion: the gross fixed capital formation by government! In 2016-17, this was 13%.

Given this change, from investments, especially growth-engendering fixed capital investment, to consumption-inducing transfer payments in this budget, the central government has finally been converted into a forwarding agency and consumption underwriter from being an investor.

This interim budget is not a befitting finale to Arun Jaitley’s five remarkable budgets. At the end of one-and-half hours of the finance minister’s speech, what came through was delusion about the current state of economy, drama on the big sops to middle class and farmers and dreams about the next 20 years! This budget may not be taken seriously by anyone, including the voter, but it has done the job it set out to do. In market parlance, this is ‘political put option’, an instrument meant to protect the political downside.

Haseeb A. Drabu is the former finance minister of Jammu and Kashmir.