There is nothing worth getting excited about in the budget. It is unclear how this is a reform budget. Wherefrom will the money come for all the major schemes that have been announced? We missed the 4.6 per cent fiscal deficit target in 2011, ending up with a deficit close to 6 per cent. Nor does the 2012 budget have a clear roadmap to accomplish the newly proposed fiscal deficit of 5.1 per cent.
What are we doing to create credibility in Indian industry? Certainly not what is virtuous. Indian business is in bad shape. Big business is running away, it is impossible for small business to operate and existing business is being strangled. This will continue unless the macro-economic fiscal situation improves. The government is crowding out private enterprise. Indian business wants the Goods and Services tax (GST) to become operational and Indian manufacturing wants their energy requirements to be met. The country has such a national entrepreneurial urge, but there have been hardly any new start-ups in recent times. Unfortunately, this government has done almost nothing to promote business in India and allowed crony capitalism to take deeper root. Unless you are someone who has the ear of a politician, you cannot conduct any legitimate business in this country.
The budget has also not done enough for job creation. How do you expect to achieve development without job creation? You have the NREGA, but it is not being supported properly. A smart country would take it to the next level. Not here. The finance minister announced the linking of NREGA to agriculture and livelihood—without linking it to technical or manufacturing skills. This kind of situation is never good for the fiscal health of the country. Foreign investors are watching Indian business carefully and this does not go down very well with them. If a choke-hold is being put around Indian business, why would foreign companies want to come here? Recent developments, which has the government wanting to snoop even on e-mails, also doesn’t help and creates a negative environment.
There have also been no economic reforms in the last seven years. And the only reform on the horizon is the GST—which has been talked about by the government for the past five years—but even that is not happening. India is also an agrarian economy. So where are the agricultural reforms? Why not give agriculture an economic boost? Even the public sector has not been able to generate enough excitement. There is hardly any proposal to build infrastructure.
We have to ensure that Indian business does not run away. They need to stay home and fight and since business enjoys public support here, unlike in the West, they can. They have to start participating in nation-building.
Manjeet Kripalani is co-founder and executive director of Gateway House
E-mail your columnist: manjeet AT gatewayhouse.in