Interim Budget: A small reflection

POLITICAL ECONOMY PERSPECTIVE

DR. CHINGLEN MAISNAM
The interim union budget for 2019-20, placed in parliament by interim finance minister Piyush Goyal on February 1, has not demonstratively tried to address the major fundamental development problems of the NER. No major plans have been announced for the Northeastern Region which badly needs industry and infrastructure in the wake of India’s Act East Policy. The budget proposal has largely unseen the appalling need for expansionary fiscal transfer to the State Governments in general and State Governments of the Region in particular. It is interesting to note that the burden of lesser tax revenues is being sought to be transferred to states. The net revenues of the Central Government in 2018-19 have been kept at a slightly higher level than in the Budget Estimates – a cut of Rs. 26, 639 crore is therefore being applied to the state’s share in Central Taxes. Similarly, the transfer to the GST Compensation fund has been cut by Rs. 38,265 crore compared to the Budget Estimates even though the GST revenue shortfall showing up in the Centre’s own budget would also be hitting State Government revenues. In other words, it appears that the Union Government is shoring up its fiscal situation at the expense of State Governments – so much for cooperative federalism. The Interim Budget for 2019-20 is less friendly for states more particularly the resourced starved and deficit proned states of North East. it fails to address job crisis. The single biggest failure of the present policy is on the jobs front. The Acting Finance Minister while talking about the economy situation avoided any mention of the job crisis. A report by the Centre for Monitoring Indian Economy (CMIE) said. 11 million Indians lost their jobs during 2018, Of the 11 Million Jobs Lost In 2018; 8.8 Million belonged to women in comparison to only 2.2 million men. Unemployment rate increased to a 45 year high of 6.1 pc. The policies have dried up the jobs and people have to find some way to survive. The Interim Budget for 2019-20 is yet another exercise in the same vein. This budget has put an official stamp on “self-employment” reasoning.
The budget claims that it is pro-farmers. However, despite the claim of making a new allocation of Rs, 20000 crore for the income support scheme for farmers to implement it from 1 December 2018, the Revised Estimates of total expenditures for 2018-19 do not exceed the Budget estimates by even that much. A curtailment of expenditure on other heads, in particular the transfer to the GST Compensation fund, is therefore where this allocation is coming from. Even this allocation and the scheme is namesake. what else can one call a scheme which promises a farmer household of 4 people an income ‘support’ of Rs. 4 per person per day?
Pradhan Mantri Shram-Yogi Mandhan is promising a pension of a measly Rs. 3000 a month after 32 years of a person contributing Rupees 100 every month – what does this say about what is the economic status the government expects the supposed beneficiaries to have after more than three decades? And what does the government have to commit itself to today for this great ‘promise’? The ‘royal’ sum of Rs. 500 crore which in addition would not be received by the beneficiary today but perhaps go to some insurance company or pension fund.
On the other hand, the only legislation that offers work to those who need it, the MGNREGA, has only been granted Rs 60,000 crore when in 2017-18 Rs 61,426 crore was spent. This was insufficient for the expenditure incurred that year by Rs 4,150 crore. This too was grossly inadequate for the 7.2 crore people seeking jobs of whom, no less than 1.25 crore never got any work and were not paid unemployment relief. Clearly the amount needed to implement this legislation properly is Rs 1,60,000 crore which is more than three times the amount touted in the budget by the Finance Minister.
Crimes and instances of violence against women have reached alarming proportions. India ranks 103 amongst 119 countries in the Global Hunger Index 2018 and India’s gender pay gap remains one of the highest in the world. In this situation, However, this budget only shows them a ‘minimum government’ that the interim gender budget for 2019-20 has come down from 0.66 per cent of the GDP to 0.62 per cent of the GDP and the total gender budget has declined from 5 per cent of the total expenditure in 2018-19 to 4.7 per cent of the total expenditure in 2019-20. The allocation for the Ministry of Women and Child Development remains at a paltry one per cent of the total expenditure. Clearly, the interim Budget has not tried to address the fundamental development problems of the people.


© 2016 - 2019 The People's Chronicle. All rights reserved.