Union Budget 2018

The Economic Survey that Finance Minister Arun Jaitley placed in the Parliament said it all. There was little scope of making the budget ‘farmer-friendly’ or ‘people-friendly’ in the pre-elections year. What the FM could at best do was to curtail allocations on one head and raise allocations on another. With a general election staring him in the face at a time when indebtedness is driving farmers to death, he had to do some time to stem the tide of anger of the farmers. This he has done by raising procurement prices. But with the price of all farm inputs (including diesel for running pump sets for irrigation) rising to what extent the farmers will be really benefited by a higher procurement price remains to be seen.
In an election year the FM also had to keep the corporate sector happy. This he has done by extending the corporate tax rate of 25 per cent to companies with a turnover of Rs. 250 crore. It was Rs. 50 crore till now. This will benefit the bigger companies though the FM says it has been done in the interest of MSME sector. But he has shown nothing in his budget speech that holds out the prospect that industrial recession, joblessness and failure to stimulate investment will be a thing of the past. Fiscal deficit is still a source of concern. There is no attempt to go into the causes of why FDI is not coming to the extent expected.
The result of the by-polls to the Lok Sabha and Vidhan Sabha in Rajasthan should also worry the FM. Frankly, less and less people are enthused by the pep talk of the Finance Minister and the Prime Minister that acche din is about to knock at our door. The economy shows no sign of acche din coming in the foreseeable future. The steep rise in the prices of diesel and petrol will have a cascading effect across the economy by raising the transport cost of commodities. The usual excuse is that with oil prices rising in the global market, the Government had little option except to raising fuel prices. Quite convincing, at first sight. The Government has no answer when confronted with the question that why fuel prices did not come down when oil prices were around $40 or $50 dollars The FM’s expects a higher GDP growth rate, but only at the end of year will the people know if his expectation has been proved true.

Wednesday, 7 February, 2018