Daily Times

The 2017-18 Union Budget that India’s Finance Minister Arun Jaitley presented on Wednesday must go down in history as one of the most stuttered and stammered efforts at making sense of political intentions and good business. Jaitley stumbled some 20 times in the first one hour of the speech, and then I lost count. The highly uneven performance is indicative of India’s economy.

The total budget outlay of Rs 21.47 trillion has largely been splurged in the vain and compulsive exercise of good will hunting among the poor villagers, women, Dalits and farmers.

That should qualify this budget as not just populist, but also singularly unimaginative. It also means the UP and Punjab assembly elections are round the corner, and that the BJP desperately wants to win them.

If the objectives of empowering the poor, in whose name most Indian governments approach the idea of the budget, are reasonably met, there should be some sense of satisfaction for the taxpayer, who is paying for the government’s sense of benevolence. But that’s not the case, as of now.

On Tuesday, India’s Chief Economic Advisor, Arvind Subramanian, who tabled the Economic Survey, had said that the subsidies are not reaching their targeted beneficiaries. He mentioned kerosene, and said only a fraction of the truly needy are getting the resource. He phrased the process as “wrong resource targeting.” In other words, kerosene is suffering from transmission losses. Although Subramanian sounded as confusing as Jaitley, he was intellectually a little more honest. The welfare measures that the finance minister announced are most likely to suffer from this chronic Indian malady. And, therefore, pointless.

Jaitley said, in passing, the demonetisation measures would do away with corruption and middlemen. Late in the day, it’s not clear exactly how. Consider for instance the odd Rs 15 trillion that came into the banks through the cancellation of the big notes. In private, bank officers say, the deposits have been largely withdrawn, and they have no idea where the laundered money has gone.

That’s an indication of how ingenuous the Indian system of corruption is. Jaitley’s performance on Wednesday set much store by digitalisation of the economy. The fact is technology is not a cure by itself, but a means to a cure. The actual cure would be more in terms of shoring up the quantity and quality of education and health, and both sectors have been flippantly treated in this budget, possibly because solid, long, fruit bearing measures have no votes in the short term.

Jaitley, too, echoed what the Survey had said on Tuesday: There is macro-economic stability. He seemed to rest the budget’s weight on that pillar.

But what does macro-economic stability really mean? How does it help my maid Kavita (a single mom taking care of three kids and bankrolls her husband who has moved in with another woman)? How does she send her kids to school? Or ensure healthy meals for her children?

Jaitley did not say macro-economic stability is a euphemism for the reasonable foreign exchange reserves ($361 billion; not much, compared to China’s trillions). But this is as likely to be a function of a better show of the import bill, on account of the tumbling oil prices. Nothing to do with the regenerative aspects of the Indian economy itself.

The 30 per cent likely fall projected in the oil prices that the finance ministry seems so keen to latch on to, may not be directly passed down to the consumer, either. Train, bus and taxi fares have not come down in proportion to the decrease in oil prices so far. Train fares actually have gone up.

The fact is there is nothing else which can be said as a positive, commissioned virtue to warrant the optimism the finance officials have displayed in their faith in macro-economic stability. There was no mention either of too many revenue generation sources. One of the steady founts of revenue, personal taxation of citizens, seems to have reached stagnation. The minister did make the usual noises about more concessions for those with lower income, which might offer some relief to a limited number of people. But in the face of lay offs, this seems a weak act of charity, not of solidarity, with the lower middle-class.

The finance minister did not acknowledge, as the Survey did, or address, the real issues facing the economy. For instance, exports are down. Mostly it has to do with a sharp slump in demand in the global economy. But the new protectionist president of the US is not helping it either. Tough visa measures have already dampened Indian IT stocks.

The budget presented no strategy to shore up the falling exports, or, internally, to help the manufacturing sector smothered by dull consumption, to get back on its feet.

Jaitley seems to hang most of his hopes of revenue generation on the hanger of Goods and Service Tax, which seeks to replace excise and service taxes and uniformalise goods taxes across the country. This remains to be seen, as the proposal promises chaos, just as demonetisation did. Jaitley stressed on “transforming, energising and cleansing” India primarily by means of welfare schemes distributed among the rural and farming India. That sounds familiar. Which is why this might as well be a budget presented by an effete, Congress-led UPA government in its second avatar. And, perhaps, with more panache. At the end of the Jaitley’s broadcast, I turn to Kavita. “Inflation is down from over 6 per cent last July to just over 3 per cent.” She looks at me in consternation, and continues dusting. I explain inflation. She shrugs and turns away. Yes, I think. If the economy is doing great, why is no one feeling good?