Tuesday, July 7, 2009

The Good, Bad, Ugly of Budget 2009!

The Good:

  • Spending to be increased on the social sector.
  • Instead of just announcing sops to the agricultural sector, the FM announced some practical measures to help farmers. The increase in the farm credit target is a good step. Also, the FM proposed to reduce the interest rate from 7% to 6% if the farmer pays back the short term loans promptly. The best step is the proposal to move to a system of direct transfer of subsidy to the farmer. If implemented, this will be a very far reaching decision in enabling the farmer to get rid of middlemen.
  • I think the disinvestment policy, started by NDA, is back! This ministry was scrapped when the Left insisted during the first term of UPA rule. FM says that this time, the public also will be involved in this process. Maybe they will open up shares to the public this time, we have to wait and watch.
  • Rs.2,000 crore has been alloted for higher education, which is a huge amount. This amount has to be invested into improvement of infrastructure, and research and development. Otherwise, it is money wasted. If anything, we need more research to be happening in our country. That's the only way innovation can be nurtured.
  • Though expected, the outlay for Commonwealth games has been increased too. I have no doubt that we will succesfully conduct the games but we need to pump in more money into developing our sportspersons!
  • Our economy hasn't broken down despite the turmoil all around! The FM said that this was primarily because the RBI took a lot of steps to ensure flow of cash into the economy.

The Bad:

  • Spending on infrastructure is gone for a toss! I think the government has to choose between spending massively for social sector versus the infrastructure sector. UPA choose the former. A fine balance between both these sectors would have helped better in the development and growth of the country. It is important that we invest in roads, irrigation projects, sports facilities, law and order, power etc. Allotments have been made to these sectors, and FM concentrated on % increase in these sectors instead of the actual numbers.
  • The salaried class got nothing! If anybody is being affected with the economic downturn, it is the salaried class. The massive rise in food prices is affecting the middle class the most, and they got nothing from this budget.
  • Nothing in the budget says about how the government proposes to reduce the spiralling food prices. It would really have been good to hear about this in the budget.
  • I am not a big fan of the National Food Security Act, primarily because it talks only about providing Rice and Wheat at Rs.3 a kg for BPL families. Most of the state governments are already providing these at Rs.1 or Rs.2/-. Even in states that don't provide at these rates, rice and wheat are provided at Rs.5-6/- per kg. Now, what was the need to reduce this by just Rs. 2/-? This might prompt other state governments to get the rates lower. In today's time, I do not think Rs.5 or Rs.3/- really doesn't matter a lot to the BPL families too. Food security act should concentrate more on providing nutritous items at a subsidised price.

The Ugly

  • Rs. 500 crore for Tamil Refugees?!?! Seriously?!?
  • Rs.1000 crore for Aila Cyclone rehabilitation. While I have no issue with this money being alloted for this cause, pray what wrong did the people of Bihar do? Kosi river did massive and unprecedented damage to almost the entire state of Bihar, and they have been asking for funds from a long time. Yet, for reasons known to all of us, Bengal gets this provision!
  • These steps also sets an ugly precedent, because this brings into focus the stupid influence regional parties are beginning to have on national policies. Many such disasters have happened in this country, will the FM give the same level of treatment to all the states?

Summary

All in all, this budget was totally on expected terms. Neither was it path breaking, nor was it mind blowing! I thought that the middle class will get some cheer, considering the economic situation but it is the poor, the farmers and the corporates that seem to have benefitted from this budget. Also, given the huge amount of spending the government is doing now, the tone of the next two budgets might remain similar.

6 comments:

Shewolf Tracker said...

Pranab din't do anything unexpected as he was scared. Shewolf had doomed the Budget. Thats why he requested other ministers to read their respective budget allotments. We caught the sign of shewolf on Pranab’s bag as he was walking in and the fear was evident on his face in the picture I posted at my blog http://shewolf.in.

Sandeep said...

It somehow looked as the FM was reading out transcripts from 1980's budget. Well overall this looked like a no-budget to me except few goodies for the poor. There has not been any conscious effort to put strong positive messages across different fields/areas which mean a lot to the development of the nation overall. On expected terms Congress' first year of this regime is ditto yesteryears'....

Teja said...

Except a few thigs here and there, nothing to cheer about in this budget. I have expected more from congress after breaking away from left. But unfortunately it's the same old story.

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