This 2013-14 budget of the UPA Government is yet another example of their Dis-connect with the people of the country. Through this Budget, the UPA Government has tried to be ‘populist’ at the cost of the Nation. However, they have failed to do that also because they do not know what the people want. Moreover, there is no direction for improving the Growth Rate of the country. There is also no linkage of the Budget with the 12th Five Year Plan. Nor there is any commitment to reduce the Fiscal deficit which is as high as 5.9% and has been going up over the years. They have also not shown any direction for ‘removing the bottlenecks’ which were promised even in the last budget. There is also no direction for skill development and /or employment generation for the youth in this youngest country of the world! Thus, this being their last executable budget, UPA has lost even this opportunity to do something good for the country.
UPA budget looks at the problems of the country in piece meal manner.
UPA budget is luke warm in nature– caught between populist measures aimed at the vote banks and country’s major economic issues. In short, it appears that UPA somehow just wants to play safe and complete their period in office before they face the election. This budget reflects that desperation and hence has disappointed people at large.
Today, we are facing a crisis- we are at a critical juncture. We are facing the threat of downgrade in ratings, declining growth, dismal job creation, acute shortage of skilled workers, high current account deficit and fiscal deficit, total lack of new projects and decrease in investment in infrastructure. Has UPA budget addressed any of these issues? While the FM assures that India’s economy would reach a size of US $ 5 trillion by 2025, there is no sign of reaching anywhere near this target.
Development of infrastructure is critical for sustainable growth. Against the much needed Rs. 55 lakh crore for infrastructure development, the budget attempts to mobilize a meager Rs. 50,000 crore through tax free bonds and infrastructure debt bonds, and that too in the backdrop of lack of project sanctions and policy paralysis. This budget has also failed to address one of the grave problems of shortage of skilled workers. Recently, we saw President Obama speaking on this issue as a grave problem being faced by America. Despite the talk about harnessing our demographic dividend, the PM also talking about it in all NDC meetings, this budget has paid only lip service to this issue by allocating a mere Rs. 1000 crores for the same. This can be understood better by comparing it with Gujarat, which allocates more than Rs. 800 crores for skill development.
Now, at the fag end of their tenure, they have realized that ‘food inflation is worrying’. But even now there is no direction or strategy to reduce this inflation. Thus, the ‘Aam Aadami’ has to remain without food even further. Moreover, there is no sign of any move to bring down the total outstanding debt from the level of 40% of the GDP. Further, not much of austerity measures have been announced. The attempt to keep the fiscal deficit below 5.2 in current year and 4.8% in 2013-14 without any clear measures to mop up tax revenues and increase the collection efficiency leads us to only expect cuts in development spending. This would further affect the investments and therefore the creation of jobs. Moreover, the Centre may resort to arbitrary cut in allocation to states.
Announcement of setting up the World’s first public sector women’s bank is nothing but a mockery. Co-operative Banks including those for women are functioning since long in Gujarat. But it is unfortunate that the UPA government is levying income tax on them, and making them unviable. This budget has not even talked about the critical health sector.
There are other issues like tax collection. The states have been requesting the centre to address the issue of deficit of trust that hinders the creation of consensus among the states on indirect tax reforms. It can be seen that CST compensation has been budgeted at Rs.9000 crores. However, for Gujarat alone, the outstanding claims of compensation will be Rs.3800 crore. This provision is a mere token and totally inadequate and will hinder the march towards GST.
Also, not much has been done to address the issue of lack of housing for the poor and middle class. Allocation of 8,000 crores for rural and urban housing is inadequate. Similarly, one cannot help wondering if the announcement of PMGSY- II for mostly Congress ruled states such as Andhra, Maharashtra, Haryana, Rajasthan was driven by political bias.
To conclude, I would say that this UPA budget for 2013-14 is a disappointing budget. It has failed to address the issues related to boosting the economic growth, cutting down inflation, usher investments, creating skills and jobs and building infrastructure. In short, the common man will continue to feel the pinch of price rise, the unemployment of the youth will continue, and the investors will experience economic uncertainty. Even where on paper some projects are shown and allocations done, given the poor record of governance of the UPA and corruption that plagues this regime, it is doubtful whether these measures will ever be implemented in the desired spirit. Thus, this budget lacks vision and is devoid of any strategy for growth of the Nation and welfare of people. But to its credit, a disconnected and desperate UPA has been consistent in disappointing the country.
Sources: CM Narendra Modi’s Blog