Infrastructure is required as per needs but sudden increase in expenditure may lead to financial and economic problems
The Budget is a carefully crafted document aiming to cultivate voters of nine states going to polls this year with largess showered on agriculture and infrastructure projects. Prime Minister Narendra Modi is right in believing that the voter wants the glitz of infra in every field. It is a politically paying proposition.
Finance Minister Nirmala Sitharaman has been euphoric in announcing programmes. In her briefing to the press, she said, “Yes, we are a political party and do it for political purposes.”
Despite natural disasters in Uttarakhand and severe flooding of various states, necessary review and check for infra investment has been avoided. It means the risk to hills and fragile areas continues. It is time to pause roads after hitting over seven lakh kms of highways and rail projects turning into shopping malls. Little is learnt after failure of such metro projects in Delhi itself.
Effectively, it means on the global pattern capital expenses to go up to Rs 13.70 lakh crore, Rs 3.20 lakh crore more from Rs 10.53 lakh crore of 2022-23. It comes almost all from Rs 17.86 lakh crore of borrowings up by Rs 1.20 lakh crore. Borrowings are almost 40 per cent of the total budget of Rs 45.03 lakh crore.
This is questionable. Infrastructure is required as per needs but sudden increase in expenditure may lead to financial and economic problems, and burden the future generation. Also not only Joshimath but now even the plains are at risk.
A number of Amrit Kaal programmes right from incentivising savings for women to virtually every aspect that benefits farmers, a strong chunk of powerful voters with over Rs 15,000-crore schemes. There are Gobar-dhan gas plants, natural farms, PM-Pranam alternate fertiliser; digital public infra for agriculture – questionable as 4G and 5G eliminate many fauna like bird species; agricultural accelerator fund; enhance cotton crop; Antmanirbhar Horticulture Clean Plant; Shree Anna–Global Hub for Millets; Green Growth fuel energy efforts; Rs 6000 crore fisheries (Rs 1000 crore less than last year) and higher
Rs 20 lakh crore agri-credit
for animal husbandry, dairy and fisheries.
While millet has higher production in the north, the research institute is to be set up in Hyderabad. Jowar, maize, and sama were part of the staple food till the Green revolution in the 1960s. Popularising it again with creation of such taste buds is time-consuming. Market increases as taste develops. The economy of scale creates remunerative prices for farmers.
This year kharif rice production has reduced by 6.2 per cent to 146 million tons, oilseeds by eight per cent (21.97 mt), sugarcane by 0.79 per cent, groundnut by a million ton. Losses have also been noticed in maize, soybean and urad.
Still 17.25 lakh farmers have benefitted from MSP payments though for various coarse crops MSPs virtually are on papers. The government’s Situation Assessment of Agricultural Household in Rural India has found that the best deal farmers could have from APMCs, maligned by vested interests and Farmers Production Organisation (FPO). The open or corporate market does not ensure prices or sustenance. This shows that farmers’ stir was on its path and corporations have to mend their ways. One reason the BJP lost the Himachal Pradesh polls was the corporate monopoly of apple business causing heavy losses to growers.
It also needs to rectify and strengthen the APMC and government run silos. Krishi startups are fine but the new tax regime may be a dampener for investors as it virtually leaves none including foreign investors.
The perky five-step income tax is good up to an income of Rs 12 lakh. Beyond that it is rigmarole and even causes higher tax outgo for individuals. Most vocal are the intellectual groups within the BJP. Some experts say no income-tax up to Rs 7 lakh is wrong, as there is confusion in new and old schemes. There are views that if corporate taxes could be effectively at 15 per cent, India, as FM claimed, the highest I-T should not more than 20 per cent and not 39 per cent as of now with various kinds TDS, including foreign remittances.
So a political budget needs more caution. Mere doling out is not enough. A lot remains as the government's agri-extension system has not helped create skilled farm entrepreneurs. The apprenticeship scheme has remained since the 1970s but it has found less favour with private companies.
With too many programmes and acronyms, the budget has missed on creating the necessary mix of corporate, people and the farming class. It is also evident it cannot move out of APMC type marketing and now it has to move out of infra obsession for more inclusive improvement as development has become a cliché.
(The author is a senior journalist)