More of the dismal same -Prabhat Patnaik
-The Indian Express
The budget needed to break new ground, provide a thrust to a slowing economy. This budget lacks innovation.
Economics has never been a strong point of the NDA government. Its only two major economic forays, demonetisation and the GST, have both turned out to be pretty disastrous. It was futile, therefore, to expect much from the Union Budget for 2019-20. Even so, one is surprised by the budget’s lack of engagement with the current problems of the economy, which are serious: A slowing down of activity, agrarian distress, massive unemployment, and external payments worries exacerbated by Donald Trump’s belligerence.
There has been a perceptible slowdown in revenue growth of late, partly because of the slowdown in activity, but mainly on account of poor GST collections. The finance minister quoted the revised estimates of receipts for 2018-19, which are close to the budget estimates for that year, but these are well above the latest figures given by the Controller General of Accounts. According to the latter, there has been a shortfall of Rs 1.6 lakh crore in GST revenue of the Centre in 2018-19 compared to the budget estimates. The situation in 2019-20, originally expected to be better, is unlikely to be so.
Expenditure in the budget, both overall and in critical areas affecting the people, scarcely shows any significant increase. At the most, expenditures grow roughly at the same rate as the expected nominal GDP. Curiously, however, MGNREGS shows a slight absolute fall compared to the 2018-19 revised estimates, which is incomprehensible in the midst of acute joblessness.
Even these expenditure figures have been projected on the basis of 2018-19 revised estimates. With actual receipts falling well short of the revised estimates, and this shortfall continuing into 2019-20, it is doubtful if even these expenditure targets will be realised without increasing the fiscal deficit substantially, which the NDA’s desire to appease globalised finance will not allow. Even these expenditure targets will not be maintained, compounding the recession that is setting in.
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