Sniffing innovation in budget-image courtesy: PIB

 

The Narendra Modi Government is treading the path laid down by the UPA Government. It is also working in the same fashion as any previous government-proceed as advised by the bureaucrats and make select deviations necessitated by political compulsions.

The new Government has so far done nothing creative in its first month of operation. It has not made any worthwhile announcement. Even the organizational restructuring of the Government achieved through clubbing of certain ministerial portfolios is nothing but slipshod implementation of certain recommendations made by Administrative Reforms Commission (ARC) during the UPA regime. 

With monsoon set to be deficient, the Government faces an uphill task of taming inflation and accelerating growth without putting additional burden on the common man. 

The new Government has to think imaginatively to usher in Acche Din (good days) for all – work opportunities for all, growth for all, essential amenities for all, peace for all and happiness for all. The annual budget to be presented by the Minister for Finance, Defence and Corporate Affairs, Arun Jaitley, on 10th July would indicate whether the Government has the political will to embrace innovative and good governance. 

Before suggesting a few ideas for tax-free and imaginative budget, let us see how the Government has so far failed to live up to the public expectations. It did not bring out a white paper, listing the major socio-economic challenges faced by the country and suggesting the way forward.

It did not put in public domain numerous reports and studies on national development and social welfare that UPA Government kept under the wraps, making a mockery of the Right to Information Act. 

FM's Picture Courtesy PIB

 

Interim budget serves as a pedestal for the outgoing Finance Minister to pontificate. The urge to lay down the agenda for the future is more when the incumbent knows that the ruling party would not return to the power after the elections. 

 Mr. P. Chidambaram has thus rolled out a 10-point ‘A Vision for the Future’ in his 2014-15 budget speech.  He perhaps aped Dr. Manmohan Singh, who had also unveiled his 10-point vision in the Interim Budget speech for 1996-97.  Dr. Singh had labeled his vision as ‘medium term objectives for accelerated economic and social development’ over the next five years. After the elections, Dr. Singh had to sit on the opposition benches in Rajya Sabha.   

Some of the objectives identified by both of them in their respective speeches have been articulated by their predecessors as well. This is because certain objectives remain eternally elusive due to the politicians’ short-sightedness and obsession to shower favours on different constituents of the electorate.   

Take the case of price stability and growth that figures as the third task in Mr. Chidambaram’s vision. Dr. Singh had listed it as the first among his medium-term objectives by pitching for 7-8% annual growth in a ‘framework of reasonable price stability.’ 

The issue of growth with price stability has been articulated by outgoing as well as incoming finance ministers (FMs) for the last several decades. To be precise, this issue has been a fixation right from the first budget speech after the Independence. 

Presenting the 2013-14 budget, Finance Minister P. Chidambaram stated: “In September, 2012, Government accepted the main recommendations of the Dr. Vijay Kelkar Committee. A new fiscal consolidation path was announced. Red lines were drawn for the fiscal deficit at 5.3 percent of GDP this year and 4.8 percent of GDP in 2013-14. I know there is a lot of scepticism.”  Yes, Mr. Chidambaram, the well-justified skepticism is now transforming into derision with the Government trying both new and old tricks to prove that FM’s red line on fiscal deficit for 2013-14 has been respected. 

With the firing of all cylinders from the accounting tricks & jugad domain, it would be hardly be surprising if FM manages to adhere to budgeted deficit in the interim budget for 2014-15. Mr. Chidambaram is bound to leave a lot of unaccounted or under-estimated fiscal liabilities to his successor who in all probability would be a non-congress, non-UPA person.