It was billed by none other than its maker, Finance Minister Nirmala Sitharaman, as a once-in-a-century Budget. Whether it really is only time will tell, though it is littered with the once-in-a-century pandemic-related references. However, from the reaction of the Opposition parties and other critics of the Government, it does seem to have done a pretty good job under the most trying circumstances, in putting together the national balance-sheet and presenting a broad outline about its income and expenditure.
Sitharaman has earned her spurs as Finance Minister after making a somewhat unsteady start last year. The fact that someone as clued-up on budgetary matters as former Finance Minister P Chidambaram should fault her for not offering any relief to the middle class in a year when the finances are doubly stretched due to slowing growth and a huge burden of the pandemic reveals a desperation to pick holes for its own sake. Yes, there can always be differences on the order of priorities in spending, or the extent to which revenue projections seem attainable, but she has left little scope for questioning the actual thrust of the budget.
The post- Covid Budget seeks to marshal resources well, not frittering away on sectional sops or cheap giveaways. The courageous move to privatise at least two banks and one insurance company should be seen in the context of the inherent resistance from within the Sangh Parivar itself against selling the ‘family silver’. That the Bharatiya Mazdoor Sangh, the BJP-linked number one trade union in the country, has openly criticised the move, underlines the extent of opposition to the privatisation of public entities.
Clearly, the Government has decided to press ahead with further liberalisation and reforms, regardless of the resistance from within the ruling party. At any other time, the proposed hike in the foreign equity in the insurance sector from the existing 49 per cent to 74 per cent would have attracted howls of protests from the Opposition. In this case, aside from the parrot-like recitation by Rahul Gandhi, the de facto boss of the Congress Party, that ‘Modi is selling the country to crony capitalists’, not a whimper has been muttered edgeways anywhere.
Yet, there is valid skepticism about whether the proposed disinvestment will net a whopping Rs. 1.75 lakh crore in 2021-22, especially given that in the current year, it fetched a mere fifth of that, while targeting a much bigger amount. It is here the Modi government will face its real test. Even those well-disposed towards the Government entertain doubts about its overcoming bureaucratic and legal hurdles to successfully sell off Air India, BPCL, and a host of other undertakings. The Prime Minister will have to invest his own considerable goodwill to successfully implement the disinvestment programme.
Meanwhile, the one big reason the budget elicited a near-unanimous welcome was the widely felt relief that she had spared both the common man and the corporates of extra tax burden. A big surprise is the lack of a substantial increase in the defence allocation, in the backdrop of the continuing stalemate at the border with China. Aside from a one per cent increase in capital expenditure for the military, there is little else over the existing allocations.
Post-Covid, a hike in tax rates, at least on corporates, would have been well in order. She did well to resist the temptation --- and provided the stock exchanges the biggest reason to go berserk. Of course, there are questions about the high growth projections, about the extent of buoyancy in revenue collections, the claim that the outgoing on defence and civilian pensions has actually come down. Maybe in the coming days, as and when the Covid-ruled Parliament is allowed to function, the debate on the Budget will throw up valid explanations for some of the more ambitious claims made therein.
For an orderly debate on the Budget to take place, the Opposition might have to abandon its noisy and obstructionist antics. Some of the scenes which led to the adjournment of the Rajya Sabha when the House met on Tuesday morning do not inspire hope of order returning to the august chambers. If it persists in creating noisy scenes, then it would have no right to complain if the Budget is passed without a proper debate. Parliamentary etiquette must prevail and people should be able to hear both sides before coming to an informed opinion on government policies.