Guest Column: Harish Bijoor, domain expert and CEO Harish Bijoor Consults
The Budget today is an eagerly awaited event. It is one of the biggest financial events in the country, curated by the Government and presented as a statement of intent, that is eagerly looked forward to. Even though the Budget is not an event, but really a journey, Budget day is big day. And today is that day!
On the eve and maybe the morn of the Budget, just before it is presented, every Tom, Dick and Harish will want to take a potshot at predicting what needs to be there, and make ones own statement of intent laid out. Here I go with my own two bit.
Firstly there is the debate that this is a “Vote-on-account” that needs to be seen as such and not a full-fledged budget. As political parties spar that point out, I do believe all of India will look at the Budget being presented today as a Full-fledged Budget for sure. One that will seek to get regularized for a full year ahead, if not more.
In this Budget that is going to be laid out for all to see, appreciate, criticize and berate, there are imperatives that no government can really ignore. I do believe the Budget will address each of these issues with strong intent. That resolve of strong intent is going to be that much more pronounced this year, as the elections are just round the corner, and possibly waiting to be announced soon. So let me crisply take a look at a set of issues that will possibly be addressed with gusto and resolve. Three big issues stare at us and these are really issues that crave a solution either within the Budget or outside of it. Issues that cry to be addressed, in that order of angst.
1. Rural farm distress: The small farmer is in a state of particular turmoil.
What started as a severe crunch on his transactions at the village level with demonetization, beginning 8 November 2016, cascaded into a spiral of slow growth in the services segment of the farm economy, which has lasted several long quarters. The services sector, which incidentally contributes substantially to the rural economy went into a slump. Add to it farm-gate prices of crops, and a rather delayed announcement of the new MSP regime, and the turmoil is complete. A set of complete non- takers for cattle as a monetization item in the rural hinterland capped the issue further with distress. This part of the economy across the 6,43,700 villages that dot India is asking for solutions.
While the immediate solution, indeed a band-aid solution, is the loan waiver of small farmers, a more sustainable plan is what everyone is waiting for. As the ruling party, the government cannot go into a total populist drive that every Congress, BSP, SP & DMK is promising. The government needs to come out with a big-ticket innovation that gets money directly into the Jan Dhan Yojana Bank accounts of farmers direct.
A direct-benefit-transfer scheme that is clean, transparent and quick is what the farmer is looking forward to. Budget 2019 needs to address this for sure, with strong logic to say that such moneys are really going to revive the farm economy, and not just lull it with temporary relief.
2. The Job Crisis Among the young: There are really two issues here. There is a reported job stagnation in the economy, with the last count purportedly talking of a loss of 0.5 Million jobs in the last financial year, instead of seeing a robust planned growth. Add to it an army of 12 Million job-seekers who enter the market. That’s a whopping 12.5 Million jobs that need to be created quick and fast.
As political parties, economists and political activists of every kind spar on this number, the key point is to address the issue of creating at least 12 Million new jobs every year. There is a need for a plan that addresses this fair and square. One that looks at the government as a catalyst of job-creation.
Will the Budget 2019 give us direction out here?
Whether within the budget document and event, or outside of it, the government needs to address this big issue. Excitement lies out here in the solutions we will see ahead.
3. The Middle-class Angst: And then there is this massive chunk called the Great Indian Middleclass. In terms of size it is all of half the population of the country, well nigh nearly at 605 Million. In it sit professionals, teachers, traders and tax-payers of every kind, with three stratifications of the “Lower-Middle”, the “Middle-Middle” and the “Upper Middle” as nomenclatures. With GST in place in a robust manner, this class is expecting pay-back. Pay-back literally in terms of tax-cuts for sure. Will the budget look at this dramatically, and will there be solutions that are not incremental but dramatic. We need to wait and watch.