"Budget: a mathematical confirmation of your suspicions." - A.A. Latimer
An astute business man was interviewing applicants for the position of a PR Manager. He devised an interesting test to select the most suitable person for the job. He asked each applicant a single question, "What is two and two?" The first interviewee was a journalist and his answer was "Twenty-two." The second applicant was an engineer. He pulled out an iron slide rule and with the help of his scientific calculator and few equations proved that the answer is somewhere between 3.999 and 4.001. The next candidate was a lawyer. He argued that in the case of Golaknath v. State Of Punjab, two and two was proven to be four. The last applicant was a bespectacled finance professional well experience in budgeting, planning and forecasting. The business man asked him, "How much is two and two?" The guy got up from his chair, went over to the door and closed it...then came back and sat down. He leaned across the desk towards businessman and said sheepishly in a low voice..."Sir! How much do you want it to be?" Needless to add - He got the job offer...on spot!!! Does the story sound familiar? If not, replace the businessman with Indian Prime Minister and the finance professional with our Finance Minister (FM) - and you create the perfect budget script!
Talking of budget Scripts in international context...reminds me of iconic Jr. Bush (Rahul Gandhi of USA). George W. Bush once infamously remarked "It’s clearly a budget. It’s got lots of numbers in it." I too harbor a (small-towner) hunch about budget numbers that Mr. FM first does his maths with single digit numbers on the back of an envelope and then asks finance secretary to multiply everything with 1000 crores on a spreadsheet. The script of opposition reaction on budget has become so predictable that they should release their statements one day in advance. The only breath of fresh air came from RaGa who used the same term to sum up budget 2017 which we have been using for him since ages "Damp Squib". But what remains beyond my comprehension is that Budget in India, far from being boring numbers, remains a national indulgence...a thrilling extravaganza! The stage is enormous, the lighting is spectacular, the extras are innumerable, and the special effects are absolutely unconstrained! Budgets to me are so much like Indian weddings...spices, salt and sugar, crunch, tears, pleasures, flavor and taste of life. But frankly, a plate of 'Pani-puri' (with the free 'sookha' at the end) does a much better job and at much lesser cost!
You may question my expertise on analyzing budget but if Abu Azmi can be an expert on Women Safety, I surely deserve some freedom to comment on budget. To begin with...our FM looked stunning in his FabIndia Kurta with a Khaadi Udyog Jacket and matching leather bag from Hidesign and that was the most notable high point of the budget. The other high point was that FM's Budget speech boasts of being the second-longest budget speeches (below his first one in 2014). FM was also applauded for conferring Knighthood to unsung heroes earning above 50 lakhs. Precisely why FM called it 'Sir-Charge' because when you earn that much, people usually call you Sir! Kejriwal thanked FM for not subsidizing shoes wholeheartedly and added that it was a pro middle class decision. Let us accept that 99% of aam janata watches budget to know whether Cigarette, 'Daaru', 'Gutka' got expensive and if there is any revision in tax slabs? Waiting to know that is like waiting through the excruciating torture of pre-placement talks and other corporate 'bhashan-bazi' to know CTC and number of jobs offered. And as usual there was no respite there which makes you think that if cigarette taxes are meant to discourage smoking, wouldn't income taxes discourage working? Leave alone the respite to taxed 'janta', FM was so much inspired by Aryabhata this year that he scored zero after zero - on Job creation, Manufacturing, Agriculture growth, Education, Health and Social Sector. And even the areas where he did not score a zero, it will do you well to keep a pinch of salt handy. Because our FM has a reputation for saying right things at right time at right place to right people in right ways but when it comes to implementation - He takes wrong decisions and further implements them in wrong ways!
There are a couple of areas where Jaitley should have provided more Arnab (Acronym for the nation wants to know). Such as, continuing his swag on digital money, FM capped the cash transactions to three lakhs...So, what are the kidnappers gonna do? Send PayTM QR code with ransom note? While FM ensured that every train will have a bio-toilet, he remained tight lipped about the expenses to be incurred on procuring chains to tie the water mug. Jaitley proposed to abolish the Foreign Investment Promotion Board. Why? To promote foreign investment? We all knew it...so why not say it? He also didn't clarify whether China would grow faster than India - At least inside India.
There were few issues where FM remained 'Manmohan' (acronym for totally silent) and even missed a few. Like FM missed the opportunity to print Budget 2017 copies on new two thousand rupee stamp-paper sheets to prove that these notes are totally usable. I, as an honest tax payer for over a decade, personally wanted FM to give some redeemable loyalty points. Is it too much to ask? Really? Even Pay TM, Starbucks and CCD has it. What was also amiss was the expected 30% subsidy to unemployed youth for recharging their girlfriend's mobile.
I am from 'Mithila' region of Bihar and hence, the annual ritual of budget reminds me of the river 'Koshi' embedded so deeply in the folklore of Mithila. The river is associated with Hindu mythology and many ancient stories and the references may be found in epics like Rigveda, Markandeya Purana, Mahabharata and Ramayana (Valmiki). But very few outside the state know that Koshi River is also known as the 'Sorrow of Bihar'. The river is infamous for unpredictably changing its course resulting in catastrophic floods and damage to crop, land and people of Bihar. While everyone knows the floods would come, there are no preparations made to sail through it. Similarly, we keep anticipating a lot from budget and year after year it keeps disappointing us. So, that brings us to the logical question...What was the flavour of budget this year? I think the answer to that is pretty obvious and the serious takeaways are:-
1. GOI, as expected, is trying to earn goodwill in rural areas through fund infusion (MNREGA, Pradhan Mantri Awas Yojna etc.) in agrarian economy and bolstering rural infra. I hope our FM also includes the unemployed engineers and out of job actors (Read Dino Morea, Uday Chopra & Jr. Bachchan) under MNREGA as the allocation has increased significantly. The increased allocation in such schemes are buttressed with an increase in credit availability & renewed focus on micro-irrigation and dairy-related activity. The combination is aimed at increasing farm income as well as making it more sustainable. The GOI believes that it would result in increasing overall consumption demand from rural areas which in turn would benefit industries such as consumer goods/ durables, two-wheelers & tractors.Increased spend on roads, housing, sanitation & electrification will improve the standard of living in rural areas on hand and support the sectors like construction, cement and metals on the other hand.
2. Apart from rural, GOI looks serious on infra (10%↑) as a whole to benefit from its proven multiplier effect. The focus is largely on transportation (especially railways/roads) including national highways (24%↑). For urban infra, the focus is largely towards metro rail (80%↑). GOI is also investing (Bharat Net programme (67%↑) in creating a strong digital infrastructure/ economy, especially for financial transactions, government schemes and education. On Real Estate front the measures are focused towards easier funding for affordable housing projects, tax relief to developers with unsold inventory and support demand in a softening rate environment. This focus is expected to boost infra related sectors such as construction, engineering, metals, cement, and logistics. The challenge lies in encouraging private sector investments in the sector to facilitate faster execution
3. GOI has restricted its borrowing from market which may help bond market. Favorable tax environment for ECBs & Masala bonds most probably would fail to support fund-raising unless they are further diluted. Further, the fiscal deficit target has been kept low too but their track record has been very poor in sticking to the number. GOI, unfortunately, once again has chosen to remain silent on asset quality of PSU Banks and the roadmap to improve it. Vijay Mallya must be laughing at the PSU recapitalisation amount...He must be thinking "Boss! I alone have taken more than that from the banks". In backdrop of a weaker investment cycle and consumption, the budget looks incapable of improving the GDP numbers significantly.
The 2000 Bahamian song "Who Let the Dogs Out" became famous worldwide. The title of the song, to me, is one's response to unruly and unacceptable behavior from others. And Budget 2017 is unacceptable to me. There were lot of expectations from Budget, especially in the wake of the costly 'Demonetisation' which has thrown the economy completely off-gear. You all know that Demonetization was introduced at a time when investments had just shown some green shoots. The impact of demonetization is still debated but there is no doubt about the fact that, in short run at least, it has hit Indian economy really hard. Given that the idea was unilaterally implemented by the GoI, it was expected that the sins would be redeemed by them (unilaterally) as well. But budget failed to provide any answers amid huge expectations. But on second thoughts if 'we the people' believed that GoI would behave otherwise, it would do well to remember the political purist Ron Paul's famous quip “When one gets in bed with government, one must expect the diseases it spreads.” Any upset stomachs reported so far in digesting budget 2017? Woof...Woof...Woof!!!
Epilogue: Arguments have typically a plurality of causes and hence, the only thing constant about my views and perspectives is that they change...and sometimes...@ diapers changed by an old man under the twin influence of - mobility impairment & loose motion. I rationalise it as an essential cost for being open! The views expressed are fluid in nature and a result of the subject, length and tone of my conversation/s at 'Brown Chai ki tapri'; the intensity and duration of scolding received from my mother; number of zombies killed by me in 'Plant vs. Zombies' & the gestation period of both the view & research done on the idea I am writing about...and hence, liable to change in time, space, degree or manner...even contrary to those you read today! Feel free to challenge, disagree, or share the wisdom that God is supposed to bless and not replace psychiatric treatment!!! The skeptics with action bias are further encouraged to file an RTI demanding the details, duration and expenses incurred towards my psychotherapy...but...I reserve my right to delete any comment even if your comment is an insufficient but important part of an unnecessary but sufficient argument! Or for any reason I may create (abusive, profane, rude, anonymous, not appreciative enough) – so would you just keep it polite...if you may...please...
Disclaimer: It would be dangerously unwise – even if the concomitant pauperism is not factored in – to play tic-tac-toe between my personal and professional opinion (read life), as defunct as either might be. Hence, if any/some/every-thing is stupid here - It is mine and mine alone (Sorry...you can't have what is mine!). Apologies, in advance for the cliched repeat "The opinions expressed here are strictly personal and my own and not those of my employer."