While all eyes are set on today’s Union Budget 2013-2014, to be presented by P Chidambaram after five years since he last tabled one in Parliament in 2008, it is a good time to recall some salient points of what the budget entails in the current economic scenario. Despite the economy in doldrums and the growth rate dipping to the lowest in 10 years, coupled with industrial production decelerating and a double digit inflation rate, the markets have learnt how to stop overreacting to the clauses and sub-clauses that the budget offers. Chidambaram is under a lot of pressure from international credit agencies as well as the RBI to plug the holes in the economy and reduce the fiscal deficit, and consequently, we are likely to have an ‘austerity budget’, with reports indicating a deep cut amounting to almost Rs 50,000 crores in public expenditure. With an eye on the upcoming general elections and assembly elections in several states such as Karnataka, Rajasthan, Madhya Pradesh, Chattisgarh and Delhi, the budget implications are certainly formidable. Chidambaram is tasked with fighting off Narendra Modi’s advancing steps towards the seat of power at the centre by doing a balancing act between promoting development and welfare planks as well as proposing a growth-oriented budget that lures and spurs foreign and domestic investment.
But the key element is not merely re-allocation and re-distribution of funds into different sectors and ministries, or even the crucial question of how the Finance Minister is going to raise resources without adversely affecting the common man. No matter, how austere the budget turns out to be, what would still remain to be factored into these gigantic financial readjustments and fiscal surgeries are the ways in which the purported benefits reach the aam aadmi. So, given the current economic situation of high fiscal deficit, continuing subsidy burden, retail inflation, admittedly Chidambaram has little leeway to indulge in pre-poll populism. However, what can be substantially improved is the business of implementation of the schemes and policies in a clear, simple, quick and transparent manner. Presently, despite some of the commendably egalitarian policies adopted by the UPA government since they were voted in to power in 2004, most of these schemes have been obfuscated by massive mushroom clouds of corruption, scams and siphoning off of funds meant for the public at large. Even the possible re-jigging of the current three-tier income tax apparatus and putting a surcharge on the super-rich might be lost in translation if the implementation and execution of the policies remain mired in dreadful inefficiency and apathy towards delivering the goals. Foolproof mechanisms to ensure fast and effective enforcement of the policies are the need of the hour, and instead of more of bureaucratic red-tape and clamouring for individual or niche benefits. In addition, the political and the service classes must understand that the story of ‘India Rising’ would remain incomplete and fraudulent if it does not become an expansive story of inclusion and promotes to some extent the utilitarian idea of the greatest good of the greatest number.
But the key element is not merely re-allocation and re-distribution of funds into different sectors and ministries, or even the crucial question of how the Finance Minister is going to raise resources without adversely affecting the common man. No matter, how austere the budget turns out to be, what would still remain to be factored into these gigantic financial readjustments and fiscal surgeries are the ways in which the purported benefits reach the aam aadmi. So, given the current economic situation of high fiscal deficit, continuing subsidy burden, retail inflation, admittedly Chidambaram has little leeway to indulge in pre-poll populism. However, what can be substantially improved is the business of implementation of the schemes and policies in a clear, simple, quick and transparent manner. Presently, despite some of the commendably egalitarian policies adopted by the UPA government since they were voted in to power in 2004, most of these schemes have been obfuscated by massive mushroom clouds of corruption, scams and siphoning off of funds meant for the public at large. Even the possible re-jigging of the current three-tier income tax apparatus and putting a surcharge on the super-rich might be lost in translation if the implementation and execution of the policies remain mired in dreadful inefficiency and apathy towards delivering the goals. Foolproof mechanisms to ensure fast and effective enforcement of the policies are the need of the hour, and instead of more of bureaucratic red-tape and clamouring for individual or niche benefits. In addition, the political and the service classes must understand that the story of ‘India Rising’ would remain incomplete and fraudulent if it does not become an expansive story of inclusion and promotes to some extent the utilitarian idea of the greatest good of the greatest number.