Interim Budget 2019: Part 2

Following up on the first part of this topic, we continue further by taking a look at other aspects of the budget.

During the budget speech, it was declared that inflation was brought under control, which resulted in savings of about 35-40% for the general public. This statement is perplexing because the two factors taken under consideration aren’t mutually exclusive or proportional to each other directly. The claim that inflation has been reduced is true but it is also indicative of the fact that the current state is resembling that of deflation and recession. The credit crunch in the current market is palpable and when it’s claimed that people have saved more than quarter of their money, then it should directly result into either demand and cash-liquidity in the markets or increased savings in their bank accounts but the present scenario and numbers don’t add up to support that claim. This behavioral pattern among the consumers is a result of the recession which has significantly reduced their purchasing power due to an environment of layoffs, job stagnation, reduced opportunities, etc.

The income support offered under the PM KISAN scheme feels like an effort to make bribes for votes legal in order to pander a part of society whose concerns they have usually ignored during their tenure. For the first installment of Rs 2000, which is to be made before the election sans Aadhar, speaks volumes of the hurdles they are willing to jump over in order to make a last ditch effort at luring them. Similar to the schemes offered by the Telangana and Odisha governments, the only thought that has gone in framing this scheme seems to be based on statistical results rather than identifying different problems according to the region, demographic, climate, etc.

The allocation of Rs 60,000 crore for MNREGA scheme backtracks on the previous attacks made by the BJP at Congress for introducing this scheme. When they came to power, the hailstorms in North India destroyed a large chunk of the crops produced ruining the rural economy. At that time, they realised that there was hardly any other scheme or system in place to provide employment and work during such crisis and hence, they had to forcibly adapt it to ensure proper functioning. But today the scheme is not as effective as it used to be because the rural economy has evolved in various other ways which seems to haven’t been taken under consideration while allotting the highest ever budget MNREGA has ever gotten in its history.

The banking crisis that the whole country is suffering through has been presented as their achievement at being able to dash out the hidden assets through supervision and strong regulations. They did alter the method and factors through which debt was being calculated under Raghuram Rajan through enforcing strong rules at restructuring of loans. It was necessary for regulating the big loans taken by even bigger companies which were resulting in NPAs (non-performing assets). But this led to an increase in debts and banks were advised by the RBI to make provisions accordingly from their profits to keep the reserves intact and manage their already accumulated debt in order to ensure a scenario of bailouts doesn’t occur in the future. While transitioning into this, Urjit Patel was appointed as the governor of RBI and then demonetization happened. But the banks were not satisfied with this instruction because they had to put their profits at risk. This led to reduction in cash-flow in the market because the banks became apprehensive at sanctioning loans. Still, due to the resilient nature of our economy, the markets survived but the recession was looming at the footsteps of the country. Then the government intervened with the RBI to release some of the reserves to create liquidity in the market, reversing on the decision they themselves made as state elections were coming up and again, to gain temporary appeasement among the masses, they started a squabble with the RBI over loosening regulations which led Urjit Patel to resign. Along with this, shadow banking too came under a lot of debt which amasses to a total of around Rs 16 lakh crores combined.

The Ayushman Bharat scheme (aka ‘Modicare’) seems promising but its results at the moment leave a lot to be desired. Last year, this scheme was alloted Rs 3,135 crore but later around Rs 1000 crore were cut from it. This scheme is still in its infancy stage and as it grows it is also necessary that the necessary background infrastructure of the health industry also grows along with it for its desired result. As of today, eight states aren’t covered under this scheme and many states still haven’t identified the insurance companies to work with. Even the announcement of the new AIIMS in Haryana doesn’t go down well given the trouble-ridden journey AIIMS is going through all over India ranging from land disputes to insufficient resources.

Rashtriya Kamdhenu Aayog was announced under the Rashtriya Gokul Mission which was allocated a budget of Rs 750 crore for enforcing cow welfare systems and rules surrounding it. Stray cows have been increasing at a rapid rate all over the country because of the toxic atmosphere created around their existence. This has led to a major downturn in the cattle and animal husbandry economy as the people are fearful of owning cows and nurturing them. Dairy industry has grown manifolds as the people in rural India look for alternate sources of income other than farming and for them cow is a significant resource for their livelihood.

Department of Fisheries was announced which showed the focus being put on the blue economy of this country. Considering it is a huge part of livelihood in the coastal regions of the country, it needs to be seen how the functioning of this department will come into the picture hoping it won’t fall into the trap of minimum governance like other new departments tend to.

A pension scheme for the workers of the unorganized sector was also launched called the PM Shram Yogi Maandhan Yojana.

This pension yojana shall provide them an assured monthly pension of Rs 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age. An unorganised sector worker joining pension yojana at the age of 29 years will have to contribute only Rs 100 per month till the age of 60 years. A worker joining the pension yojana at 18 years, will have to contribute as little as Rs 55 per month only. The Government will deposit equal matching share in the pension account of the worker every month.

This scheme is nothing but pittance being offered as it doesn’t take into consideration the cost of living in the future and how age expectancy will affect its functioning. Moreover, a monthly pension of Rs 3000 in today’s world doesn’t ensure anything and these monthly deposits when added up make it seem draconian in nature as the costs don’t add up to the result being provided with the intention of making profit at the cost of their lives. Instead of being a social security net, it feels more like a fish trapping net.

The provision made for the TDS which is obtained from the banks at an interest for Rs 10,000 has been increased to Rs 40,000. This decision was a much welcomed one as it would benefit the pensioners and senior citizens of the country significantly.

A substantial increase is proposed in the allocation for welfare of
the Scheduled Castes and Scheduled Tribes. The allocation of Rs 56,619 crore made in Budget Estimate (BE) of 2018-19 for Scheduled Caste, further increased to Rs 62,474 crore in Revised Estimate (RE) is proposed to be enhanced to Rs 76,801 crore in BE for 2019-20, an increase of 35.6% over BE of 2018-19. For the Scheduled Tribes also, proposed allocation in 2019-20 BE is Rs 50,086 crore as against Rs 39,135 crore in BE 2018-19, an increase of 28%.

Considering the numerous protests from the SC/ST communities against the present government, this move feels more fabricated and forced rather than presenting their genuine concerns for the problems faced by these communities. It’s an effort to play the card of vote-bank politics as elections inch closer and the dissent grows louder. 

This budget should be an interesting exercise and experiment in finding the truth in relevance to the saying, ‘Money Talks!’, in the present-day political climate.

Sources: The Lallantop, Feminism in India, News18, NDTV, Indian Express, Livemint, Newslaundry, StudyIQ, ThePrint, Hindustan Times.

Image Source: The Economic Times

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