BUDGET WILL DO A KAIPO CHE - ON OUR POCKETS!
By Ruma Dubey
Every time the countdown to the Union Budget begins, there is trepidation tinged with anticipation. But this time around, there is only trepidation and no anticipation for anything positive. An able Finance Minister, P.Chidambaram is in place and if left alone, he will do a good job. That is a big “if”.
With Elections scheduled for 2014, this is probably the only Budget where the Govt will be able to do some good for the economy and the Budget for next year will be all about politics and giving away as much largesse as possible. So there are two view points here; firstly, many confer that the Budget will be harsh as this is the only opportunity for the Govt to try and rectify the financial mess which the country is in and all effort will be on cutting the fiscal deficit. That would mean higher taxes, more taxes. But the other point of view is that the Govt might hike taxes and bring more under the tax gambit but this might not be supported by reduction in Govt spending. 2014 might be the year of election but it needs to initiate ‘social benefits” right from now or else the benefits will not percolate to the people when they go to the polls in 2014.
Thus we might see taxes going up but at the same time, those in the poorer section of the society will get more benefits. Well, middle class be damned! The Govt’s pet project – the National Food Security Bill is sure to be the highlight of this session. ‘Madam’ is said to be personally looking into this bill on a day-to-day basis. As per the new revised Bill, the Food Bill now proposes to give legal right to over 5 kg of foodgrains at Rs 1-3 per kg per month to about 70% of the population as suggested by the Parliamentary panel, Food Minister KV Thomas. Earlier, the Govt had proposed giving 7 kg of wheat and rice per month per person to 'priority households' and at least 3 kg of foodgrain at half of the Govt fixed support price for the 'general' households.
Politically and socially, this is a very good move. But can we afford it? If the proposed food security Bill is passed, the food subsidy bill is expected to rise by Rs.27,663 crore to nearly Rs.95,000 crore and the foodgrain requirement would go up to 61 million tonnes from 55 million tonnes. And this at a time when the Govt is trying to control its spiraling fiscal deficit and oil companies are busy cutting down on oil subsidies. At a time when India needs to look at where it is spending money, this largesse to win votes is something we can ill afford. But Montek Singh Ahluwalia very valiantly has said that money spent on subsidizing food should not be linked to the budget deficit. This is like a household spending money on a lavish wedding thinking that this spending will not send its entire household Budget into a complete toss! Whether you do your pranayama by directly holding the nostril or by bringing the hand around the neck and then holding the nostril, it all tantamounts to the same. The bottomline is that – this way or that way, someone will pay for this Food Bill and when more revenue needs to be generated, naturally, taxes will go up.
Agreed, we should be an egalitarian but should that be at the cost of jeopardizing the entire country? Instead of this Bill, the same money could have been spent on making the agrarian sector more productive, create more employment opportunities, encourage R&D in agriculture, bring more land under cultivation instead of giving it all away to greedy land grabbers.
When the Govt wants to present a social Budget, paint itself as a messiah of the poor and play politics at the cost of the country, naturally we all will pay the price. Waiver of farmer loans helped UPA win elections but today, farmers borrow knowing fully well that in all probability they might never have to repay the loans.
‘Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime’. Probably, if the UPA had followed this idiom, India would have been a much different country and we would have welcomed this Budget with great excitement and little trepidation. Instead of keeping the poor poor by giving them subsidies, shouldn’t the aim be to give them sops to lift them out of their poverty and push them onto the next rung on the ladder? But then, if the poor climb up the ladder, who will vote, right?
Yes, this Budget will be only about politics and economics will come into play only when it comes to taxing people like me and you.