The Union Budget presented by the Finance Minister Shri Pranab Mukherjee is a national disappointment. The entire country awaited the budget in the midst of economic gloom, treating it as an opportunity wherein downturn could be reversed. This lack lusture Budget clearly establishes that the UPA Government has run out of ideas. It is all at sea on how to tackle the existing situation. The Union Budget is a lost opportunity. The glimmer of hope held out by the reforms suggested in the Economic Survey has proved short-lived. The road map suggested to the Government by its in-house Economists in the Economic Survey has not been found acceptable
by the UPA.
The nation expected a budget which would generate enhanced economic activity. It would give a fillip to investment. It would lay down the road map for reducing the fiscal deficit. The Budget was expected to generate employment. The nation hoped that the agricultural sector would move out of distress. The Budget was expected to prime up the economy with huge public/private investment in infrastructure. We hoped that the declining trend of India’s export would be checked and reversed. More money would be put in the pocket of consumers by reducing taxation. The nation would be assured of reduction of interest rates. It was considered logical that the real estate and housing sector would be incentivised. Sadly none of the above subjects was paramount in the mind of the Finance Minister.
This Budget is incapable of generating extensive economic activity or attracting investment into the country. The Budget admits that the fiscal deficit has moved up from 2.7 per cent to 6.8 per cent. This disturbing figure is an under- statement. The extra budgetary items, along with the fiscal deficit of the States would carry this figure well into double figures. The revenue deficit pegged at 4.8% of GDP is a matter of even greater concern.
The UPA in its earlier tenure had promised One crore more jobs annually. In stead of generating Five crores additional jobs during the period 2004-09, India has actually seen a dip in employment. The Economic Survey partly admits this. In this Budget, without announcing any steps to give a fillip to employment, the Finance Minister has expressed a pious hope of creating 1.2 crores jobs annually totaling to 6 crores jobs during the present tenure of the UPA-II. Infrastructure creation has been a major casualty during UPA-I. The Budget either through public investment or fiscal means does not give any significant indication of rise in infrastructure investment. There is no new concession or any new idea which is capable of reversing the trend of declining export. It was expected that the housing and real estate sector would receive certain incentives from the Finance Minister. The Finance Minister has preferred the status-quo. With the base of taxation increasing, tax concessions were expected in order to improve the purchasing power of the consumers. Indirect taxes have been increased by Rs.2,000 crores. This will be a burden on the taxpayers. The Budget does not address agrarian poverty in any manner. The 7 (Seven) per cent interest rate to the farmers will continue to keep them in distress. The President’s Address in the last Session had raised a false hope that disinvestment would commence again. With the investment environment absent in the country, it does not appear likely that any significant disinvestment can take place. After realizing the virtues of disinvestment, even if it is of the minority stake, the Budget has placed Rs.1120 crores as a modest target. This would only be a drop in the ocean of ever increasing fiscal deficit.
The Prime Minister assured the country that significant steps would be announced to bring back into the country black money presently kept in tax havens. The Finance Minister has not used the Budget as an opportunity for taking any steps in this direction.
The BJP however welcomes the introduction of one-rank-one-pension in relation to the Armed forces. The much discredited Fringe Benefit Tax, the Commodities Transaction Tax have been abolished. This was the standing demand of the BJP ever since these taxes have been introduced.
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