Letters

Reforming the economy

 

Finance Minister Nirmala Sitharaman’s mega talkathon Budget did not unleash any big bang reform. It failed to address issues concerning GDP growth, private consumption, investments and manufacturing, all of which have hit record low levels. A reduction in Central funds for schemes concerning agriculture, health, education and welfare of Scheduled Castes and Scheduled Tribes was disappointing. What is more shocking is the slashing of real allocation on MGNREGS, a vital instrument to fight rural poverty. However, moves like the allocation of ₹4,400 crore for clean air; and the announcement of linking one lakh gram panchayats through BharatNet are welcome (Front page, “Booster short,” Feb. 02).

S.S. Paul,

Chakdaha, Nadia, West Bengal

Ms. Sitharaman has ‘peppered’ her marathon Union Budget speech with quotes from Thiruvalluvar(Tamil sage poet) , Aauvaiyar (Tamil saint poetess), Kalidas (Sanskrit poet) and Dinanath Koul (Kashmiri poet) and references to India’s ‘past glory’ as an economic power. But they do not act as a stimulus to growth in industry, manufacturing, agriculture and services. Platitudes and hackneyed phrases generously employed make little budgetary sense. Catchphrases like ‘aspirational India’; ‘economic development’; and ‘Caring India’ in themselves make no difference. The Budget is proof that the government is clueless about the economy in these stressed and unsettled times.

The Minister has spoken of ‘ease of living’ and ‘bringing happiness’ to people in her long-winding Budget speech. But the Budget lacks in concrete proposals to bolster the economy. It was a missed opportunity to lay down a roadmap on how to pull the economy out of the slump. The Minister has reiterated the goal of $5 trillion economy by 2024. But it looks unachievable simply because an average of no less than 9% growth rate now looks unachievable.

The Minister has not sketched out her plan for boosting consumption and private investment and creating jobs. The reduction in the allocation of funds for MGNREGS will only aggravate rural distress. Similarly, the cut in food subsidies will adversely impact on the impoverished people and their nutritional status. There is no significant measure in the Budget for the impoverished masses to cheer. The budget is by no means pro-poor or ‘populist’; still the Sensex has, somewhat inexplicably, slumped by nearly 1,000 points. Despite Prime Minister Narendra Modi’s promise of jobs, unemployment, now an all-time high, has got only scant space in the budget. It is disappointing that health and education have not been prioritised for allocation of additional funds.

The planned partial disinvestment of government stake in LIC has come in for a lot of flak and rightly so. The promise of ‘doubling farmer income’ by 2022 becomes empty without a word on ‘minimum support price’ in the budget. The fiscal deficit target is 3.3% of the GDP; it has had to be increased to 3.8% for the current fiscal. It is also a moment to reflect on whether the social unrest due to divisive measures like CAA does not deter foreign investment. The income tax cut and abolition of dividend distribution tax are marginally beneficial, but disproportionately hyped up. The government is yet to acknowledge that the economic challenges are not just cyclical, but structural too. There is nothing substantial in the run-of-the-mill (and pedestrian) Budget to suggest that acche din is in the offing or anywhere in sight.

G. David Milton

Maruthancode, Tamil Nadu

The Sunday editorial, “No fireworks”, considers it premature to pronounce any verdict on the Budget, except linking its likely impact to the economy’s performance in the next four quarters. It is time we give up the notion that Budget proposals can command the economy and steer it in a predetermined direction. The economy has been evolving faster than before, with changing demographics driving the demand for goods and services in unpredictable ways. Many segments like the automobile industry are on the cusp of a major transformation in terms of changing customer preferences and the imminent switchover to electric vehicles. Global trade developments and world oil supplies and prices, often unforeseen and uncontrollable, wield considerable influence on the economy.

A Budget neither can be exceedingly good nor egregiously bad; it can at best be a mixed bag of good proposals, mixed opportunities, and questionable policies.

One expects the Opposition to criticise the Budget’s perceived omissions and flaws while mustering the honesty to welcome proposals that may help to revive the economy. Trashing the budget as irredeemably unproductive is immature.

V.N. Mukundarajan,

Thiruvananthapuram

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Printable version | Feb 20, 2020 12:35:35 AM | https://www.thehindu.com/opinion/letters/reforming-the-economy/article30720812.ece

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