Union Budget 2017 disappointed many, especially the opposition parties. They expected Finance Minister Arun Jaitley to announce some big bang sops after demonetisation. Being seasoned strategists, both Jaitley and Prime Minister Narendra Modi not only avoided the sops-trap but left little opportunity for the opposition to launch a serious attack on the merits of the budget. Consider some of the comments that came from the opposition ranks.
Congress vice-president Rahul Gandhi mocked the budget as “sher-o-shayari”. West Bengal Chief Minister Mamata Banerjee termed Jaitley’s Budget announcements as “controversial” She tweeted: It is “clueless, useless, baseless, missionless and actionless. Heartless. No roadmap for the country or the future from a government that has lost all its credibility.” Banerjee even asked, “where are the figures for Demonetisation?”
Former Prime Minister Manmohan Singh kept his verdict on the Budget reserved but wondered why Jaitley is so confident about the positive effects of demonetisation. “(There were) far too many items (in the budget). It is very difficult to immediately react about the impact of this budget,” Singh was quoted as saying by PTI. “There is no indication as to what makes the finance minister convinced that demonetisation effect will be temporary and it will not affect the growth of the economy,” the former PM added.
The fact that Singh couldn’t give his immediate verdict on the Budget tells a lot about its merits which has been hailed by many economists for enforcing fiscal discipline. Interestingly, Singh’s comments on Jaitley’s previous three budgets were almost similar.
The former PM, who also doubles up as a Congress economist, had said in 2016: “There is no big idea except one, which was yesterday mentioned by the PM himself that the government plans to double the farmers’ income in next five years.” His comment in 2015 was: “My worry about the budget is that it has good intention but it does not have an adequate roadmap and framework to implement the initiative.” Singh had repeated the same in 2014. “Just like the railway budget, there are no specifics in this Budget..there are no road maps.”
While serving as the PM for 10 years before Modi, Singh had championed populism, so much so that India’s fiscal deficit jumped from Rs 126,912 crore to Rs 515,990 crore between 2007-08 and 2011-12. During the same period, India was rocked by a series of high-profile scams. Interestingly, Singh continues to be revered as one of India’s brightest economists.
In contrast, Modi government has shunned UPA’s populist approach to budget and opted for strengthening the Indian Economy with fiscal prudence and digital push. Budget 2017 has pegged fiscal deficit at 3.2% of the economy for 2017-18. In 2014-15, the fiscal deficit was 4.1%.
With the focus on creating enabling an environment for people by spending more on infrastructure, education and skill development, Jaitley’s Budget is a death knell for Manmohanomics. Modinomics has just begun.
(Inputs from agencies)