By R S Bawa and Rajiv Khosla
The Union Budget for 2017 has been presented in the midst of a volatile international economic scenario. Both the United States and the United Kingdom are countering increasing protectionism.
The American dollar is starting to gaining strength, OPEC and non-OPEC nations have reached a consensus to reduce the supply of crude oil and the US Fed has started increasing the rate of interest; not to mention that the Indian economy is still recovering from demonetization.
Under these circumstances, the finance minister, Arun Jaitley is playing it safe by extending some relief to both the common man and small enterprises. He is at the same time, consolidating the fiscal deficit. Populist efforts have manifested in the form of increased monetary allocation for MNREGA, a tax rebate for small and medium scale enterprises, decrease in individual tax rates among others. However, the intricacies involved in this budget can only be brought to the surface when each sector is analysed separately.In this budget, Arun Jaitley is playing it safe by extending some relief to both the common man and small enterprises | Picture Courtesy – The Indian Express
An apathetic budget
To start with, it becomes pertinent to mention that the overall, size of the budget has come down from 13.4% of GDP last year (revised estimates) to 12.7% this year. Important sectors like education have not received any significant disbursements.
[su_pullquote]No road map has been given for the dissemination of online courses in terms of the medium of instruction, the arrangement of physical infrastructure and so on.[/su_pullquote]
Though this sector is responsible for bringing true the dream of digitisation, yet allocation to this sector is miles away from meeting the ‘6% of GDP’ mark as recommended by Kothari Commission in 1966. Further, no road map has been given for the dissemination of online courses in terms of the medium of instruction, the arrangement of physical infrastructure and so on. In the absence of which, promises may merely become hollow claims akin to the previous budget too.
Similarly, in the context of skill development, it would have been better if the finance minister had focused on ‘synergizing’ the efforts of different organisations involved in skill development instead of constituting the National Testing Agency or restructuring the UGC. To compound matters further, nearly 20 government bodies imparting skill but we don’t even have a unified definition of ‘skill’.
For the health and medical sector, the finance minister has with much fanfare announced increasing seats in medical colleges by 5000, which are churning out no more than 50000 graduates and 7000 surgeons per year. However, with an additional allocation of a modicum amount of Rs. 10000 crore, creation of world-class medical colleges would be a fiction of imagination.
Weak foundations of an ill-planned digitisation
The NDA government seems committed to jump-start digital transactions and turn the Indian economy into a “less cash” society. A number of measures were taken and incentives were offered. Among these were referral bonuses for users of Bharat Interface for Money (BHIM), cash back scheme for merchants who accept the payment system and banning cash transactions over Rs 3 lakh among.According to the budget, The NDA government is committed to jump-start digital transactions and turn the Indian economy into a “less cash” society | Picture Courtesy – Hindustan Times
Increasing usage of digital technologies is followed by an ever increasing cyber crimes rate. On this front, no provisions have been made.
Especially setting up infrastructure to curb thefts and (re)training the expert manpower. Furthermore, in a scenario where the common man is pressed to make payments using digital means, political parties are permitted to accept donations up to Rs 2,000 in cash.
[su_pullquote align=”right”]The philanthropic measures taken by the finance minister are impotent and too optimistic when compared with the herculean task of reviving the economy on a fast track.[/su_pullquote]
A reduction of cash donations from Rs. 20000 to Rs. 2000 will only increase the number of receipts issued from the receipt book as now the proceeds to the extent of Rs. 1999 will be made instead of Rs. 19999. It would have been appropriate to bring the activities of political parties under the ambit of RTI Act as suggested by Central Information Commission, 2013. Last but not the least, the philanthropic measures taken by the finance minister are impotent and too optimistic when compared with the herculean task of reviving the economy on a fast track.
Dr. R S Bawa is the Vice Chancellor at Chandigarh University. Dr. Rajiv Khosla is the head of the University School of Business at Chandigarh University.
Featured image source – Indian Express
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