When we think of achieving 5 Trillion economy, the first thing our mind can imagine is that our social and economic indicators are supporting this claim and the economy is moving in the right direction. But does that reflect on the ground? The question that may bother us is: is it feasible and can we achieve the target as announced with the present pace of economic growth? Setting target is a good idea but implementing that idea to visualise the dream is far more important than what has been envisaged for the next five years.
It was expected from the Finance Minister to come out with concrete measures that could have boosted economic growth and keep the fiscal deficit in check and also present measures to generate desired employment to impact all social indicators along with economic indicators. However, to my mind, the 2019 budget sounds more ambitious but less realistic and therefore has got mixed reactions.
Arun Kumar, Malcolm Adiseshiah Chair Professor, Institute of Social Sciences and author of ‘Indian Economy since Independence: Persisting Colonial Disruption’ and Vision Books, while reacting to the budget, told Radiance, “There are many announcements in the budget but adequate funds have not been allocated for achieving the goals set out in the announcements. Additional resources needed to be collected to fund so many schemes. The amount raised is the same as in the Interim Budget on February 1, 2019 but many more schemes have been announced. If funding is inadequate, announcements don’t make sense.”
On the target of achieving a GDP of $5 trillion in the next 5 years, Prof Kumar said, “The main problem confronting the economy is the declining growth of the economy. If this situation does not change, achieving a GDP of $5 trillion in 5 years is unlikely. This goal has been repeatedly announced in the last month. The growth rate of the economy has come down to 5.8 per cent and is declining so to achieve an average growth rate of 8 per cent, in the final year the rate of growth will have to be more than 10 per cent. This sounds almost impossible.”
“The budget needed to give a push to the economy to reverse the declining trend in growth. For this to happen, demand in the economy has to be increased which requires increased private and public investment. But public investment has been cut back as witnessed in the decline in capital expenditure from Rs.9 lakh crore plus last year to the planned around Rs.8 lakh crore this year. The target set by the government is an expenditure of Rs.100 lakh crore over the next five years. For that, they needed to increase capital spending to more than Rs.15 lakh crore this year and towards the end go to about Rs.25 lakh crore. In brief, this target is also unlikely to be met,” argued noted economist Arun Kumar.
“In brief, the arithmetic of the budget is very doubtful. There was an opportunity to increase the growth rate of the economy to achieve the target of 5 trillion economy but that is not going to happen with this kind of budget. The demand slowdown in the economy started with the shock to the economy from demonetisation. Further, shocks were administered by GST and NBFC crisis. These shocks impacted the unorganised sectors the most and they are declining. That is why the farming sector is in crisis and employment generation is tardy,” said Prof Kumar.
“The budget needed a strategy to get the unorganised sectors to start growing but this is missing. Usually the budgets cater to the organised sectors and this strategy needed to be changed. In brief, a bold strategy was required to give a boost to the economy, but that is missing,” opined the Arun Kumar.
“Since the budget contained the same programmes already announced, I have no additional comments to make. It is to be hoped that the central and state government will work towards the goal of doubling farmer’s income within the next few years,” said M.S. Swaminathan, founder of the MS Swaminathan Research Foundation, who is popularly known as the Father of Green Revolution in India and has served as Director General of the Indian Council of Agricultural Research and Principal Secretary, Ministry of Agriculture.
Mehmood Khan, social entrepreneur, IIM-Ahmedabad alumni and retired as the global leader of innovation at Unilever-London, shared with Radiance his viewpoints on the budget saying, “It’s a confused budget; they don’t know what they are doing. They are making a vision statement which all of us know in India what it does because of its population growth it will become a 5 Trillion economy.”
“Nobody is bothered and taking comments in terms of quality of life and what is going on in society. It can be on the expected lines only when there is some coherence, but I don’t see any coherence in the budget. There are various things happening around us and they are talking something different. The finance has not even put the figures in her speech as we all wanted to know. For example, this is the total revenue and this is the total expenditure. They want people to figure out for themselves. I don’t know on what she spent her 2 hours and a half during the budget. That is why I am saying that it is a confused budget. We would like India to become more coherent, more systematic and more caring that is important,” said Khan who is also Managing Trustee of Rasuli Kanwar Khan Trust which is a non-profit organisation working for all round development of people at grassroots level in Mewat region in Haryana.
“There is no word on Sustainability. Currently, India is very unsustainable. There are stresses on all our resources. Life is becoming threatening all around. Water, livelihood, air quality, tree plantations, caring society. There is no word on all these areas. How are they going to make India sustainable and caring society? How they are going to improve relationship among 1.3 billion people to live in peace with each other,” argued Khan.
Dr. Naushad Ali Azad, former Head of Department, Department of Economics, Jamia Millia Islamia and Dean, Faculty of Social Sciences, Jamia Millia Islamia, told Radiance, “Given a slowdown across the Globe, India has an opportunity to get its acts together for gaining ground in the areas of agriculture, manufacturing and infrastructure development. Keeping this in view, I think Modi government 2.0 has presented a budget of vision, intent and hope without committing to numbers in a big way.”
“Emphasis on fiscal prudence, equity, inclusiveness, zero budget agriculture, environment protection, digitisation and use of innovative technologies is a reflection of some milestones enshrined in Sustainable Development Goals (SDGs). The success of this budget of intent, however, will depend on mobilisation of resources and the machinery of implementation,” said Azad.