Kirit S Parikh, Chairman of Integrated Research and Action for Development (IRADe) and former Planning Commission Member, raised a pertinent question: How are these promises to be financed?
Union Budget 2019 has promised something for everyone. From income tax rebate for the middle-class, Rs 6,000 promised for small farmers, a pension scheme of Rs 3,000 per month after the age of 60 years for unorganised sector workers, deductions for medical expenses for senior citizens, raise in student loan interest, and home loan interest, and more.
However, Kirit S Parikh, Chairman of Integrated Research and Action for Development (IRADe) and former Planning Commission Member, raised a pertinent question: How are these promises to be financed?
The elephant in the room
The farmer income transfer project itself is touted to be Rs 75,000 crore for 2019-20 and Rs 20,000 crore for the current financial year. Along with that, there are a lot many areas which saw a steep in budget allocation.
Urea subsidy rose from Rs 45,000 crore to Rs 50,000 crore. The allocation for direct benefit transfer increased from Rs 16,500 crore to Rs 29,500 crore. Writing for The Indian Express, Kirit S Parikh notes that the Investment in non-governmental undertakings increased from Rs 9,400 crore to 15,800 crore and transfer to the national investment fund raised from Rs 40,100 crore to Rs 50,600 crore. There are several minor increases and decreases in other schemes as well.
The silver lining
The only consolation to be found is in the estimated increase in the government revenue, which will rise by 14.33% in the next financial year 2019-20, over the revised estimate of 2018-19. A less than 3% increase in tax collection, with inflation at 4% and GDP growth at 7.5%, will be enough to reach the target, Parikh said. Hence, the budget of 2019 is not entirely unachievable, he added.
Parikh also points out that the budget does not elaborate on how will these goals be achieved. It does not talk about how the government will cater to higher growth rate or how employment will be created. Also, there is still no light on how Modi’s pet scheme Namami Gange will see the light of the day.
The growth in the level of investment and industrial production has not been promising. Also, the distress of unemployment looms large backed by the NSS report which has not been released yet. “If this is an indication of unwillingness to accept the reality of joblessness, the much-needed measures to create jobs may not be forthcoming,” he said.
While there are speculations that the budget measures are motivated by the upcoming general elections of 2019, the problem is not the motive behind the measures but the attainment of the promises, Parikh concluded.