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Less Visible Budget Facts

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  2 March 2016 12:00 AM GMT

There were certain facets of the Union Budget for 2016-17 that were very visible. They were the highly enhanced allocation on infrastructure—especially the rural, farmer-centred infrastructure and the laudable concern for caution and good housekeeping at a time when the entire world was going through bad economic times. Also visible was the government’s eagerness to tax the wealthy to the limit and to make most luxury items costlier. Predictably, no one is going to lose much sleep over such steps to rake in higher revenues. They are ratiol, justified an expected measures in a development oriented economy. The steeper tax on cigarettes should be seen as a boon on the lines of the greater outlay proposed on healthcare and education. However, there are facets of the Budget that are far less visible and far less highlighted that need mention.

Perhaps the most important facets of the Budget that are not so visible are the lowering of the fiscal deficit and revenue deficits that have not had the kind of publicity they deserved. The fiscal deficit target has been set at 3.9 per cent for 2015-16 and at 3.5 per cent for 2016-17.For 2017-18, the fiscal deficit target has been set at just three per cent. The revenue deficit target that was set at 2.8 per cent for 2015-16, is already at 2.5 per cent. What is most likely to be missed out at a time when a whole lot items like cars (big and small), SUVs, gold and diamond jewellery, air travel are going to cost more, few people seem to have given a thought to the push factors on prices that are exerted also by higher rates of fiscal and revenue deficits. What really happens most often is that even when the government does not announce higher costs of certain items, they begin to cost more soon after the Budget because of the push factor of higher budget deficits. What is also likely to be missed out is the promises made to the rural population for a better quality of life. There is a promise to electrify all villages by 2018. There is a promise of LPG for rural kitchens in the very near future just as there is promise of dialysis facilities in every district hospital in the very near future. These are laudable goals in a land that has been subject to very poor levels of healthcare at government hospitals for as long as we can remember. As such, these are facets of a welfare budget that tend to be overlooked in a milieu that is looking more at tax rates and worrying more about prices of things and the cost of fuel and electricity either going up or down. The latest Budget keeps tax rates virtually untouched at the lower levels while making a few modifications only at very high levels of income. Perhaps the best news for the Northeast is the allocation of Rs 33,097 crore for the development of the region.

There are two things about the latest Budget that are not visible because they are not there. One is the total lack of vision that characterizes even the most pedestrian of budgets. There is not a single item about which one can grow ecstatic or even excited. All said and done, it is just a reflection of good housekeeping. There is little to look forward to. And while there is more than the requisite emphasis on skill development, there is no indication of what is to be done with developed skills. For instance, there is no indication of what India intends to export to other countries. There is normally no need to talk about what the country intends to import. Our import bill has been going up from year to year. We keep importing everything from fossil fuels to rubber blankets for the lakhs of offset printing machines in the country. With all the attention given to skill development, there should have been at least one export item that the Budget should have been able to draw attention to as a select and sophisticated item of export that developed skills had made possible.

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