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Budget 2017 Rests On Four Broad Pillars
This government in the last two years and more had demonstrated its vision, strategy and ability to make lasting impact on the nation’s psyche
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First, it comes at the cusp of the upcoming state elections, after-shocks of demonetization, lower inflation rate and surgical strikes which Finance Minister Arun Jetley says raised peoples’ expectations from this budget. Second, on a number of global parameters like the Ease of Doing Business, Foreign Direct Investment (FDI) and World Bank Indices especially for emerging markets, India is a bright spot. Third, this budget includes innovations in policies that had been announced earlier but are being implemented now like the merging of the Railway Budget with the main one and the Goods and Services Tax (GST). Fourth, the budget comes a day after the shock policy revisions with regard to H1B visas by the Trump Administration which will impact Indian IT companies. This found a significant section of India Inc. in a more somber mood than they would have been otherwise.
In tandem with the above build-up, there are a host of measures that target the upcoming election constituency especially in the states of Uttar Pradesh and Punjab: a series of measures and budget allocations for rural India and agriculture: from increased farmer credits to higher budget for irrigation and skilling of masons. Keeping in line with Prime Minister Narendra Modi’s whirlwind global diplomacy in the last two years and more, the Foreign Investment Promotion Board (FIPB) that had done some good work in the early years of the reform process from 1991, now stands abolished. This is hoped to satisfy the growing global investors. But this may be more symbolic because the FIPB of today had already lost much of its teeth. A host of measures for Indian Railways is targeted at the traditional middle class. Small dollops and lollypops have been doled out to a mixed bag of sectors or sections of populations including affordable housing, the differently-abled, higher education, telecom, tourism, women and children. The Common Man made famous by R K Laxman’s cartoons and Delhi Chief Minister Arvind Kejriwal has got significant personal income tax reliefs, while small and medium businesses also have got a better deal. The Defence allocation shows a significant jump while poverty alleviation measures have been given increased allocation for MNREGA. Similarly, highways, roads, railways and airports have also been given the leg up. With all these, Dalal Street gave the budget a big thumbs up.
But, at the end of the day, Budget 2017 lacks some of the pluck that the earlier budgets of Arun Jetley had. In a way, it is a bit of a disappointment.
This is because the boldness and the risks that characterized the government’s recent actions like demonetization and surgical strikes were not on display in the form of new policies that could have had far-reaching impact for the nation as whole. Small benefits that add up to a big share of the pie for a variety of sections of people have shown in the past that they largely promote incrementalism. This was also perhaps a good opportunity to dramatically up the impact of flagship initiatives of this government like Make in India, Digital India and Skill India. In both the above, the government seems to have adopted a tactical approach rather than a strategic one with a few measures for Digital India.
This government in the last two years and more had demonstrated its vision, strategy and ability to make lasting impact on the nation’s psyche. But while the jury is still out on whether they have been good or bad, Budget 2017 could have been a good opportunity to unite the nation for a common cause of economic and social growth and development.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.