‘Acceptance of mismanagement’

Expert Speak

The finance minister clearly broke away from the convention of presenting a Vote on Account by presenting a full-fledged Budget.

However, the Budget was on expected lines. It is an election year Budget with announcements to please its specific vote banks - farmers, middle-class and labourers, among others.

Most parts of the Budget speech were dedicated to what has been achieved in the last five years and promising a ‘Shining India’ by 2030. To cater to the needs of the Hindi heartland, the minister delivered most part of his speech in Hindi, to directly reach out to its electorate there.

It is an all in all populist Budget. There is an income support scheme to marginalised farmers of Rs 75,000 crore. For the middle-class, there is an increase in the standard deduction, an increase in tax-free income limit to Rs 5 lakh and an increase in gratuity limit.

There is an increased allocation for rural spending. There is also a pension programme for large un-organised sectors. Interestingly, there is an announcement to create “Rashtriya Kamdhenu Ayog” to look after effective implementation of policies and schemes for the welfare of cows. If all these increase the fiscal deficit to 3.4%, so be it.

For the IT sector, the Budget is a great disappointment. There was a reference to create a centre of excellence for Artificial Intelligence (AI) and there was a reference to reskill up to one crore youth under various schemes, including AI and startups.

But all these are marginal announcements. The startup industry was looking for the scrapping of Section 56 relating to Angel Tax. But, there was no reference to that in the speech. So the new guidelines issued by the DIPP for getting approval from CBDT stands. Hope the new government which comes to power in May 2019 sees reason and scrap this section altogether.

As Bill Clinton once said, “It’s the economy, stupid”. The key issue before the electorate today is the lack of jobs and lacklustre economic growth. There is distress all around. Farmers, middle-class and SMEs were all impacted in one way or another due to blunders like demonetisation and haphazard implementation of GST.

The Budget is a clear acceptance by the government of its mismanagement of the economy in the last five years and asking the electorate to re-elect it based on tall promises.

Only time will tell whether the electorate will buy this narrative.

(The writer is former CFO of Infosys)