By Aabid Firdausi MS
Had this years union budget been presented in any other ‘normal’ year, the current euphoria around it would have been understandable. This year, however, was unfortunate enough to see the ripple effects of the imposition of a new normal upon us.
Trivialising the collateral: Demonetisation, more than just a nudge
Demonetisation was widely regarded as a nudge to a cashless society. This is gross injustice to the very philosophy of libertarian paternalism that behavioural economists like Richard Thaler and Cass Sunstein (authors of Nudge) endorse. The authors explain Nudge as an intervention that is easy and incurs low cost in its implementation. Calling demonetisation a ‘nudge’ is tantamount to a callous indifference to the numerous deaths caused in the process.
Demonetisation has pushed the economy to a recessionary trough; the spillover effects of which the CMIE says might last for another five years or so.
The falling growth rate also needs to be taken into consideration. This is compounded by the uncertainties in the global arena.
Demonetisation still remains a highly debated government policy. | Photo Courtesy: QuartzThe US, often heralded as the torchbearer of liberal capitalism is turning protectionist, while India, despite its large domestic market, seems to continue to embrace the uncertainties of global finance. Set against this backdrop of extraordinary times, the Union Budget has missed the last ride to redemption by being utterly unimaginative.
Demystifying the Budget allocations: A political smokescreen
The budget is a financial statement as well as a political document. As usual, the former was used for statistical jugglery while the latter created the necessary smokescreen. The MGNREGA, hailed as the “the largest and most ambitious social security and public works program in the world” has been systematically diluted over the years in the name of fiscal consolidation. The so-called record allocations were merely marginal increases in allocation when compared to the revised estimates of the previous year.
[su_pullquote]The mandatory Aadhar requirement, despite the Supreme Courts foreboding, makes it an exclusionary programme violating the right to work.[/su_pullquote]
Hours after the budget speech, the Peoples Action for Employment Guarantee released a statement on scroll.in that the increase was just 1% after factoring in the supplementary allocations. The mandatory Aadhar requirement, despite the Supreme Courts foreboding, makes it an exclusionary programme violating the right to work. The budget talked about doubling farmers income by 2022 but provided no significant road map for the same.
There seems to be no concession for the debt-ridden farmers through any loan waivers either. SC/ST allocations have been hit after the Plan/Non Plan components have been done away with. The activists are calling this a regressive step. This is not even good politics given that the previous year saw a surge in Dalit uprisings.
Hampered spending: Health and education expenditure remain worrisome
India might be competing to become the next big private investment destination, but it ranks along with the poorest Sub-Saharan African countries in terms of health outcomes. The budget did virtually nothing to resolve the issues plaguing the public health sector. This is unfortunately unsurprising given that India spends a meagre 1.3% of the GDP in the health sector. The hike in spending is again statistical jugglery as the government had cut down expenditure in the previous years. Ambitious targets like the elimination of TB in 2025 have been set. These targets seem far from achievable given that India is regarded as a High Burden Country by the WHO.
The budget retains its notoriety in spending low for education (3.8% of the GDP).
This can severely hamper the prospects of harnessing the Demographic Dividend of the country. The Sarva Shiksha Abhiyan was allocated just around 1000 crore this year. While there were talks about improving learning outcomes with no commensurate allocation. Rich in narration, the much-needed spending is nowhere to be seen. The austere resolve to stick to a fiscal deficit target of 3% in the coming years shows the governments love affair with the status quo necessitated by the interests of global finance.
Regressive thinking: Failure to accept structural issues
The Budget that focused on creating a Tech India adopts measures that are equivalent to putting the cart before the horse. The cyber security infrastructure is scandalously ill-equipped to push towards a digitalised economy. One cannot help but wonder why Aadhar is mandatory for securing employment, but not so for making political donations.
[su_pullquote align=”right”]One of the striking features of India today is its unprecedented growth of inequality.[/su_pullquote]
One of the striking features of India today is its unprecedented growth of inequality. The chasm between the rich and the poor, as shown by the recent Oxfam report overshadows the statistics the minister quoted to lament over the poor tax compliance of the average Indian.
Thus, when tech India, FDI, and growth(not to forget demonetisation) are talked about with much hype, one should not forget the grim statistics of over 1.5 lakh manual scavengers or over 1940 lakh people living in hunger in India.
The divide between the rich and the poor seems to be intensifying in India. | Photo Courtesy: Economy LeadDuality seems to be ironically the rule of the land, where non-duality was preached with much elan.