Now a digital budget, the red-coloured “bahi-khata” held by Nirmala Sitharaman is the 13th budget of the Modi government and the seventh in a row presented by herself. The focus, as always, is on the poor, women, youth, and farmers. While this budget keeps the capital expenditure (capex) the same as Rs 11.11 lakh crore, it gives monsoon relief in the new tax regime, wherein per cent there is zero tax up to Rs 3 lakhs and so on. The fiscal deficit is kept at 4.9 per cent, with an affirmative target of 4.5 per cent for next year. Innovative policies like the space economy fund are hugely appreciative.
The interim budget presented before the polls carried no single vote-pulling scheme as the government focused on playing clean politics and good economics, but the results of the polls might have changed the party’s outlook. After below-expected outcomes in the Lok Sabha polls as well as by-elections, the BJP cannot afford to lose in the upcoming four state elections—Maharashtra, Haryana, Jammu and Kashmir, and Jharkhand. The budget presented today speaks volumes about the government’s approach to balancing politics and economics. The budget focused largely on Bihar and Andhra Pradesh, the home states of JD(U) and TDP, respectively, the key alliance partners of Modi 3.0.
While there is no special status for Bihar or Andhra Pradesh, the FM announced that special assistance would be given to both states by multilateral development banks separately. Power projects, including the setting up of a new 2400 MW power plant at Pirpainti, will be taken up at a cost of Rs 21,400 crore. New airports, medical colleges, and sports infrastructure in Bihar will be constructed. The government acknowledged its commitment to the development of Andhra Pradesh, the assurance in the Andhra Pradesh Reorganisation Act, the state’s need for capital, and the completion and financing of Polavaram irrigation projects.
Speaking of spiritual tourism, the government focused again on Bihar’s Mahabodhi temple, Nalanda as a tourist centre, and Vishnupad temple. Of the religions that originated in India and spread to other countries, Buddhism holds the greatest potential to attract international tourists. Government efforts to focus on Gaya and Bodhgaya can enhance the transnational Buddhist circuit spanning the India-Nepal plains. However, the absence of essential amenities such as washrooms, petrol stations, eateries, inns, signage, and milestones along several stretches of the circuit causes significant inconvenience to tourists.
A major national issue was thankfully acknowledged in the budget: the flood-affected states. Highlights were in Bihar, Assam, Himachal Pradesh, Uttarakhand, and Sikkim. The government announced financial support of Rs 11,500 crore for Bihar. It also announced assistance in the flood management system for Assam, which grapples with floods every year. Himachal Pradesh will receive support through multilateral development banks. Uttarakhand will also receive assistance.
The ones who predicted budget proposals must be happy with at least MSME, infrastructure, and agriculture proposals. Not so surprising but prudent areas were mines and minerals, natural resources, renewable energy, and skilling. The priority areas were set to be productivity and resilience in agriculture, employment and skilling, inclusive human resource development and social justice, manufacturing and services, urban development, energy security, infrastructure, innovation, research and development, and next-generation reforms.
The government is willing to focus on agriculture research and development, cropping as per climate resilience, and the engagement of domain experts. With a focus on natural farming, self-reliance on pulses and oilseeds like sesame, mustard, sunflower, etc, is commendable. Aatmanirbharta in oil seeds will reduce the current dependency on edible oil imports from 60 per cent to 30 per cent over the next five years. Further, with the research budget of the agricultural department, the government will strive to promote private partnerships with companies engaged in the oilseed extension programme and research activities. Finally, a clarion call for digital public infrastructure in the agriculture sector. A national cooperation policy is set to be planned and launched for the all-inclusive development of the cooperative industry.
The word ‘internship’ in the budget excited the students and young population. However, this may seem to be relevant. There are three new schemes for jobs and employment: for first-timers, for job creation in manufacturing, and for support for employers. A provision for internships in top companies with a decent stipend of Rs 5,000 is announced. The participation of women in the workforce is targeted to be increased. New skilling loans and relaxation in education loans will benefit ambitious youngsters. An all-round, all-pervasive, all-inclusive saturation approach to the development of human resources (people) is being adopted. It aims to cover all eligible candidates through various programmes—a social justice viewpoint indeed.
In its development agenda, the budget follows the jurisprudence of ‘vikas bhi, virasat bhi’. From Amritsar-Kolkata industrial corridor, industrial node at Gaya, Patna-Purnea Expressway, Buxar-Bhagalpur Expressway; Bodhgaya, Rajgir, Vaishali, and Darbhanga spurs, and an additional 2-lane bridge over the Ganga at Buxar at a total cost of Rs 26,000 crore. This seems mostly Bihar and East-India-focused.
Continuing its national narrative of inclusive development, the government announced that PM Jan Jatiya Unnat Gram Abhiyan would adopt saturation coverage for tribal families in tribal majority villages and aspirational districts. Announcing more bank branches in the northeastern states is a welcome step. Balancing urban and rural development is the need of the hour. In its industry polish, special attention is given to MSMEs and the manufacturing sector, which is labour-intensive. Technological and credit support for e-commerce hubs for MSMEs is welcome, helping them to hone their capabilities to compete globally. The focus on renewable energy, including solar, is kept intact with schemes and subsidies. Nuclear energy’s usage in India’s energy mix will be a major plus.
The defence budget has been slightly reduced from Rs 455,897 crore to Rs 454,773. Also, it is relevant to see employment and skilling proposals. Our neighbour China, too, focuses on the skill training of its youth and citizens. By providing employment-linked incentives, the government hinted slightly at listening to the positive demands of the Opposition. This was listed in the Congress manifesto. Over-attention to Bihar and eastern states will draw criticism from others. Let us observe how these proposals get implemented in the next one year. Salary earners pay huge taxes; that is still not solved. Further, the slight change in tax slabs will not help anyone.
The Finance Minister has finally addressed GST rationalisation. To streamline the GST process, a three-tier structure should be considered. A more effective approach would be to maintain the 5 per cent rate for essential commodities, combine the 12 per cent and 18 per cent rates into a 15 per cent bracket, and introduce a third bracket for sin and luxury goods, possibly around 40 per cent or slightly lower. This method can simplify and clarify the taxation procedure.
Aditya Trivedi is a Delhi-based corporate lawyer and founding director, Arth Vidhi. Ritwik Mehta is founder, Niti Tantra and a political strategist. The views expressed in the above piece are personal and solely those of the authors. They do not necessarily reflect News18’s views.
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