The big bang for the buck
Budget analysis has become such an arcane exercise because of the use of terminology and phraseology that confounds the aam aadmi. Here’s a typical talking heads debate on a news channel immediately after the budget was tabled.
Anchor: The nation is waiting to hear all of you demystify the budget so that the average citizen can understand what it is all about, so let’s keep it simple for the benefit of the one billion viewers out there, according to TAM. Let’s start with Mr A, the renowned analyst.
Mr A: First, let’s look at the imperatives. This was fiscal prudence coupled with considerations of inter-generational equity. All this required balancing rhetoric and targets which were credit constructive in some areas and not in others. So we do see the green shoots emerging from barren soil, in other words…
Anchor: Yes, very illuminating, let’s see what our banker has to say. Mr B?
Mr B: Essentially, the FM has tried to apply tax on tax by grossing up. I also notice that the restructuring of FCI and the efficacy of PDS is to be taken up. Further, public sector banks will need a huge infusion of capital to comply with Basel III international regulatory norms.
Anchor: Very succinctly put. Now our well-known columnist, Mr C.
Mr C: My considered view is that the FM has done well to push for GST and DTC — this is crucial in view of recent developments on the AML and CFT front. The discontinuation of KVP and NSC is a positive sign as they had squandered their equity…
Anchor: Fascinating. We now have the director of one of India’s leading IT companies. Mr D?
Mr D: I can see the outlines of a strategy to create an eco-system of entrepreneurs and global start-ups. Plus I also see a focus on the MSME segment. In addition, the proposal for technology use in SMB is a welcome step.
Anchor: Great stuff. Now we have the renowned economist, Mr E.
Mr E: First, let us be clear that this budget was aimed at the neo-middle class. Just look at the Shyama Prasad Mukherji Rurban Mission, the Deendayal Upadhaya Gram Jyoti Yojana and similar rurban schemes. Another significant feature of the budget are the mop-ups from non-tax revenue which affirms the fiscal correction path.
Anchor: Wonderful. Let’s hear from the financial expert, Mr F.
Mr F: The FM has announced that MNREGA, BRGF, RIDF, RMSA and OROP are to be continued. We will also have more AIIMS and IITs. Change with continuity is a good thing. The other big bang announcement was that there will be no CSR and SLR requirements for infrastructure investments.
Anchor: Clear as crystal. We now take you across to the Opposition camp to get their view. We have Mrs G speaking to us from the Congress headquarters.
Mrs G: This is nothing but a copycat budget. There is no attempt to bell the cat or take the bull by the horns. It could be a budget delivered by UPA 3, which I was so looking forward to instead of going backwards. Our finance minister (what’s his name?) would have done exactly the same.
Anchor: We now turn to a man who was invited to Harvard University for a lecture on how to balance budgets — Mr Lalu Prasad Yadav.
LPY: I see no Swadeshi. I only see PPP and FDI…
Anchor: But surely there are some concrete steps…
LPY: Yes, the statue of Sardar Patel. Lots of concrete will be required.
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