Solid foundations for economic growth – but there are glaring omissions

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While welcoming Union Finance Minister Arun Jaitley’s initiatives to revive the derailed economy and fulfill people’s aspirations, Loksatta Party national President Dr. Jayaprakash Narayan said the Union finance budget is short on specifics in some matters and outright deficient in some others. 

Addressing a media conference here today, Dr. JP pointed out that there is welcome continuity in following the previous Government’s road map for reining in fiscal and revenue deficits. The budget has sought to promote manufacturing and improve infrastructure by offering customs duty, excise and income tax incentives. It has outlined measures to attract investments in a number of sectors and plans to expedite introduction of GST (goods and services tax). It has provided income tax relief by raising the exemption limit. There are added incentives for savings. All these are positive steps which will stimulate the economy, build infrastructure and promote jobs. 

He noted the Union Finance Minister has clearly stated that the assurances to both Telangana and Andhra Pradesh States will be honored and announced opening of certain educational institutions. 

The Union budget, Dr. JP said, is however vague in certain matters. Mr. Arun Jaitley has not specified how he is going to reduce the nearly Rs.3 lakh crore subsidies on food, fuel and fertilizers. He has chosen to appoint an expenditure management commission. He has not spelt out how he is going to rein in the fiscal deficit and seems to be banking on a nearly 20 percent increase in tax revenue, unfazed by the anemic economy. He has not outlined how Rs.2.40 lakh crore will be raised to meet the capital adequacy norms of public sector banks or how public sector undertakings will invest Rs.2.48 lakh crore. 

Dr. JP said the budget has failed to address problems in the agriculture, education and healthcare sectors. Fifty percent of the country’s population continues to depend on agriculture although its contribution to GDP is only 14 percent. The budget ought to have contained measures to boost, for instance, production of oilseeds and pulses by imposing duties on imports, and offering production incentives to farmers. Instead, the Government is resorting to knee jerk reactions like banning export of produce like onions and potato and bringing them under the purview of the Essential Commodities Act. Only higher production, supply chain logistics and value addition will reduce inflation while enhancing farmers’ incomes. 

Dr. JP said the budget did not provide any road map for ushering in a national health service as in Britain. It has not attempted to address the problem of appalling educational standards in schools and colleges. 

Dr. JP pointed out that the next 10 years are crucial for India. People have for the first time in a normal election after 1980 given a clear mandate to a single party in the hope that it will help them realize their hopes and aspirations. All our energies and resources should be focused on employment generation, economic growth, creating opportunities for all, and eradication of poverty. If we miss the bus now, two generations will pay a heavy price, and the 21st century would bypass India. He hoped the NDA Government would live up to people’s expectations by undertaking course correction in areas he referred to. 

Loksatta leaders Katari Srinivasa Rao, Bandaru Ramamohan Rao and Mrs. N. Saroja Devi took part in the media conference.

Friday, July 11, 2014 - 05:00