March 4, 2010

AN ‘OBJECTIVELESS’ AND TIMID BUDGET

Shortage of a hundred and fifty million rural employment jobs. Shortage of twenty five million urban employment jobs… Additional Rs 1 lakh crore required to replace urban slums… And Rs 10,000 crore required every year for five years to give justice to every Indian by ramping up the judiciary… Another Rs 20,000 crore required every year to make universal primary education a reality and have equality in education opportunities… And additional Rs 10,000 crore required annually to give some basic access to health facilities… Welcome to India. A country where the hospital beds to population ratio is 1:1422, ranked 161 alongside sub-Saharan African countries, against an ideal ratio of 1:333 prescribed by the United Nations. A country with 2.4 million temples but only 1.4 million temples of education i.e. schools… A country with 30 million cases pending in courts, making life hell for the common man who wants justice, because our courts have only 12 judges per million population compared to 120 judges per million in the developed world.

In the middle of such an environment, what’s the role of an annual budget? Is it to maintain status quo or to give the world a robust signal that we are committed to our people – the 45 crore people who earn below 1.25 dollars a day? If the objective is to maintain the status quo, then Pranabda has delivered a perfect budget, as loudly proclaimed by each and every member of the equally objectiveless and visionless industry organisations like FICCI, CII and ASSOCHAM etc. They were too happy that the entire stimulus package had not been withdrawn. As it is, the spokespersons aren’t independent intellectuals. They are timid business men – however rich they might be – scared to ever speak against the government as their businesses are at stake! In most cases, they aren’t even capable of commenting on the budget, such low is their understanding. But they are the people who give the bytes and that’s what next days headlines look like in papers indirectly and directly owned by them and mostly run by sold out editors or editors intellectually incapable of analyzing a budget or how it needs to be. So the verdict that they have given is thumbs up!

The man on the street, of course, has no voice. And his concerns are of no importance to politicians or media. Media has no vision to effectively and constantly focus on their cause in order to effect a change. They are more interested in rapes, murders and sex, which keep the readers confined to intellectually dumbed-down dustbins of these media houses.

The truth, however, is that if we were to look at this budget from the perspective of people – those 45 crore that I mentioned above and another 35 crore who are just marginally better off – then this budget is a hoax for them. Allocations to the best scheme of the Sonia government, or for that matter any government in ages – the NREGA scheme – wasn’t even increased enough to cover the inflation! What was done was a mere increase from Rs 39,000 crore to about Rs 41,000 crore. At a point of time when the common man is being made to pay an astoundingly scary Rs 50 per kg for sugar and Rs 100 per kg for dal, when the food inflation has touched horrific proportions and when they were looking up to the budget for some relief, forget immediate relief measures, there were no signs of any long run relief either in this budget. No lip service even to stop hoarding. No measures to stop speculation in food. No recommendation of strict punishment to the hoarders and no announcement of using the country’s huge forex reserves to import basic food necessities to increase supply and reduce prices. In other words, totally shocking. The reference to the aam aadmi went missing. It was clearly a budget for the mango people who live in India and not the aam aadmi who lives in Bharat.

The long-run steps to increase agriculture growth through a new green revolution got a token Rs 400crore. Nothing could have been more hilarious. Now, NBFCs (non banking financial institutions) can open banks and Rahul Bajaj must be very happy with his part of lobbying. But the real requirement of financial inclusion, which reaches a rotting low of less than 200 million people compared to the required 900 million people, still remains unsolved. At a time when so much had to be done for the poor who are the direct sufferers of the high inflation, the government gave away Rs 26,000 crore to the middle class and rich through its new tax structure favouring the two per cent top class of people who pay taxes in this country! I have been always for lesser taxes to increase tax base, but in a year like this, such a move was a bit too much to accept, especially when compared to the lack of commitment of resources for the bottom 70 percent people.

The allocation of Rs 22,300 crore is marginally up for national rural health but still is too less when you look at the fact that 85 percent of Indians do not have access to health insurance; and every year, an estimated 30 million people slip below the poverty line because they have to meet healthcare expenses though out-of- pocket expenses.

So is all bad? No! We are now going to have a new symbol for currency; similar to the dollar and the euro. And some agency, which will design it, will make a lot of money! It’s assumed that the developed world is so full of donkeys that despite the pathetic conditions that we have bestowed upon a majority of our people, the developed world will respect India due to a new symbol of our currency. Oh yes, how can I forget that in times of such internal security crisis and naxalite movement, a hilarious number of 2000 new paramilitary forces will be employed!

All in all, there have been some welcome extra investment in infrastructure and highways, good non-pollution initiatives, and some great tax structure changes if you are a tax-payer. For the rest, it has been an objectiveless exercise. Bringing me back to the question, ‘why have such a budget at all?’ When throughout the year, the government in any case keeps announcing various policies, then why should we not let the budget be a mere statement of results? Why this sham? There is no accountability… the poor hardly get anything; and to top it all, during the last year, a whopping Rs 1 lakh crore of allocated funds remained unused! It will only grow this year. I repeat, to me it was an objectiveless budget. A mere timepass.

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32 comments:

TheMoney's Market said...

Sorry Guruji, but I don't agree to you. This Budget is a more balanced, pro growth policy document. More money has been put into consumers' pockets, creating an enabling environment for substituting govt. consumption with accelerated growth in personal consumption.Net tax revenue growth is pegged at 15%, above nominal GDP growth of 12.5%. Overall government expenditure is to grow by just 8%—slower than nominal GDP growth. Revenue deficit and fiscal deficit are budgeted to decline by 120-130bps in FY11. Slower growth in expenditure relative to GDP has reduced expenditure as % of GDP by 60bps. The robustness in personal taxes reflects the strong underlying momentum of growth in personal incomes as well as better tax compliance pursuant to lower effective tax rate.

HundReD said...

After reading this (good) article, i was forced to write a comment. Its really appreciated that you have such a good insight into the figures and prevailing conditions. But i will like to ask a few questions.
Sir, first, do you really think that the Union Budget is actually a place where one can solve these problems? i don't think so sir.
second,about the prevailing conditions of education. Well, i personally think that there is already alot of money that has been put in this field. What is really missing is a 'cane'. Use this age old instrument, invented before money was invented, and one might see things start following in place.

Agreed, that the man on the street has no voice. But that is so because he has himself choosen to do so. He is more interested in Mahender Singh Dhonhi and Aishwarya Rai then in his own condition. Media exploits this like anything. But this not the case only in India. Media has been tool to keep the people dumb, is also there in countries like US. Just watch over there life. all they count on is senseless relation ships(not with family, but with the one they met at a bar!), alchohol, sex, and of course- the idiot box.
I agree with you about the new banking licenses. We are definately in for privatization, but by privationzation one does not mean one private house like Reliance controlling everything! One can dial- 'R' time and again
for reforms.

Now coming back to the Budget. Sir, as you must also be believing in that big changes don not happen over night and it takes (sometimes) decade to bring changes about which you have mentioned. So sir, perhaps Pranab Da would have been able to delivere the same at one go. But what he has clearly shown is that there is a vision in his mind for India, by either putting DTC impleemntation by next year, or by GST implementation. Or by a commitement for Unique ID Programme (the only thing that can ensure that the money meant for the poor actually reaches the poor), or by spending on Infrasture which can create jobs for the people earning less then $1.25 a day.

THERE IS A VISION IN PLACE FOR OUR INDIA!!!

Jagdeep-Bhunga said...

I do agree with u sir... no magical decision is there....no preference to education...and bla bla bla.....but they know how to use media...as u talked abt FICCI and others is an example of it.......

Anup Chowdhury said...

It is an well thought article, and should get appreciation from all quarters. It is very much fact this type of budgets are being placed for years after years continuously for last sixty plus odd years of our independence. The stats do not always show the actual situation we all know that, only some news about happenings like stampede to death in shrine leads us to think otherwise, and you see, such happenings (I can say them events as those happen each and every year at least on one occasion and maintain regularity) only feel us to see the tip of the iceberg of discrimination to a large section of the society. Media in India does not play any role in construction of the society. We feel pity for them. Only for this we have to face the secessionist movement which are still a big threat to India after sixty years of Independence. I also feel a great leadership void who can lead the mass to a definite direction for prosperity to all and work as a great leveler of the society. In fact we have to go a long way to achieve the goal.

DEBKUMAR said...

I could see our honourable ministers Both Mamta and Pranab, using I more often than anything else in their respective budget speeches. Which means, it is the effort of an individual. Then I ask to myself, what the Ministry is doing when the entire exercise is done by the individual.

Can any one appraise me.

DEBKUMAR BHADRA
Andaman

DIVYESH said...

Respected Sir,
I am a student pursuing MBA.
It has really been a mind blogging experience so far to read your blogs as a "PROUD INDIAN".
I am following many other writers but what makes your blog different,along with your views,is the kind of comments that i can see on your blog post.
simply outstanding, fabulous and this will help me to build my career and also to do some good deeds for my country.
Thank you.

Radhakrishna said...

Dear Arindam,
Your article rubbishing the union budget lacks substance.Instead of resorting to highligting the country's innumerable problems,please enlighten us how the annual budget could solve them.It would be best if you could present your "MODEL BUDGET" for the year 2010-2011 so that we can make a fair comparison.

RK said...

Dear Sir,
What are your solutions to the objectiveless and timid budget as you put it? All our problems of lack of jobs and lack of healthcare facilities and lack of enough schools are all either due to population explosion and thus resources not keeping up with the burgeoning demand or lack of National Character amongst all sections of society. To exemplify, look at the No of private universities and private B Ed Colleges that have sprung up!! But in each of these places, the main agenda is money making and one can obtain a degree without attending a single class!! Situation in Govt schools is no better! So while the Govt earmarks funds for education, privatizes education for creation of more infrastructure, it is grassroot lack of character and corruption by all sections of society that negates all efforts of the Govt! So who is to blame? If the poor Indian man cannot understand the effects of population explosion and keeps producing hungry mouths, no Govt has a magical wand to provide jobs for unemployable, uneducated massess which keep getting added to our population! Govt can only make schemes, implementation has to be done collectively by all. So I suggest please guide us (The Country as a whole) on your solutions and just do not give us a resume of the problems, wand lay all blame on just the Govt of the Day! We already have enough of naysayers already!

Adi said...

@ The Money Market : India is a country with a rural populace of 75%. What do this 75% people get? That answers all your questions and asks more questions on the budget.

@Hundred : The only vision Pranabda has is to make sure the congress continues to plunder India and remain an impotent government. To add to the woes, the opposition is not strengthening itself when the ruling government is making a mockery of power.

@ Rashakrishna : Your comments are unwarranted and undermines what Mr. Arindam has done. You must do a little bit of research before you post such a comment. Mr. Arindam has a model budget every year. Please check the blog archives and you will find a BRILLIANT model budget. Please READ IT.

To all the readers :

A budget should focus to bridge the gap of inequalities. Instead of temporary growth measures, one must focus on education which is a long term and visionary tool for improving the minds of the common man.

Secondly, what is a democracy if not for its law, order and justice. Therefore, it is of paramount importance to ensure a swift and speedy justice in the courts. A judicial reform is HIGHLY IMPORTANT and the budget conveniently chose to ignore this fact.
Why?
Simply because, Pranabda and the congerss government is not going to get any votes on judicial reforms as the common man is not interested and nor are the corporates who have BMW's and Audis.

Blaming the media?
This is by far the stupidest thing one can do. The media CATERS to our needs. Too bad we have pathetic needs and want crass news like murders, rapes etc...
On this i beg to differ from Mr. Arindam.

All comments are welcome. Thank you :-)

Dholpursuresh said...

Your compilation of data on current problems of India is indeed impressive. But, like a few other commentators, I like to ask what are your solutions.

Also, I like to say that the greatest all-round deficiency in our country is lack of Performance Appraisal. Have you appraised performance of earlier Budgets? Do you teach your students methodology of performance appraisal?

I have many more queries for you , if you care.

RAM said...

Dont U see any future at all for India? Is India and it,s admis doomed?Even U have to agree in spite of all odds , good and bad budgets, corruption Etc India has prospered.Come on Arindam take your own case and examine. What were you about 30 years back and what are you today.I have a house help,a lady. She has two daughters.Both of them have completed their matriculation and joined colleges.They had free books,free good lunch provided by the Govt, free education.The Mother cannot believe this has happened.I dont know about the rural poor but the urban poor have come up in life, just like me who is a headmaster,s son in a quite happy position to day, which my father never can believe.

Shruti Sharma said...

Very well said Mr. arindam, It is required to pull up the people lying down, rather than to push up those who are already at middle and upper level......
Free books, Mid day meals etc. are just a few initiatives from govt.....there is still a lot more pending...

Hasnain said...

Mr Arindam i mostly agree with u on ur views.But the answer to such grief social problems in india is not just a budget like this but the constitution on the whole. The govt is doing its very best to improve socio-economic conditions of the country but opposition from non ruling parties, corrupt politicians n officers in state/central govt, etc r the biggest barriers in the progress of the country. Sixty years back India & China were almost neck to neck in social,economical n political aspects but see what progress they have made today.I firmly believe that India is a country with a lot of talent n potential but if the
foundation is only not strong then the country will continue to face such problems for the next indefinite years.
Coming to this budget there was no provision for attracting FDI, increasing employment,Controling food prices n inflation.Groceries price continues to rise, to cover up the fiscal deficit the custom ,excise duty n fuel prices has been hiked which will inturn make indian manufactured goods more expensive compared to its chinese counterparts. And even after this i'm sure there won't be any change in ur fiscal deficit courtesy to ur corrupt politicians who will usurp all the tax money:)

Adi said...

@ Hasnain : You compared India to China and how China's economic growth is far ahead of India's. Can you also compare China's Human rights record with India's ?? Can you compare China's free press with India's ?? We can go on with the gargantuan list of issues like these. :-)

investigation report said...

"Economic Growth" that's the alms of neo-colonialism and our own keen businessmen and politicians abhorred by the poor and rich alike is not the yard-stick of quality of life of individuals. The poor standards of life of many will vicariously affect the privileged as we live in one society. I feel the analysis is apt as I have seen the repurcussions of the human state compared to 'subsaharan' Africa - it is bad for women and children back here, in fact the worst in the world. The poor will commit crimes to make up for the inflationary rates and the privileged encourage that to maintain their hegemony, their egos. Nothing's changed from British Raj - only Mir Sadaks and Ambhis have grown in number and are part of parliament now! When asked why I was unmarried at thiry I had one answer, "There are no real men in India. Only metrosexuals, businessmen licking white asses in luxury hotels, petty to big politicians, males analysing everything on the planet growing a paunch, lurking genuine artists, criminals, perverts and the like - no real men at all. The state of the country and what happened to me, declares it."

Mr. Paul said...

Dear Mr. Arnindam
To be very honest with you before reading this article I had more respect for you then in comparison with now and my reason is very simple because today I find you also in same crowd where many people look for recognisation and public eye. To support my view point i have many things in my mind but I would like know a very few from you.
(a) can you keep your hand on your heart and truly say that "this budget is objectiveless and timid" if so India is a vast nation with so much of diversity and entire world is watching its upwards though slow march, had this budgets not been there do u really think that all this progress whatever slow it may be would have happened by s sitting in the AC compartments?
(b) Your whole attention and intention seems to be focused at criticizing those who are putting their heart and soul, day in and day out to see that country progresses. If you think all this exercise is futile and worthless then why don’t you contribute by actively coming forward and participating in the activities of the Government because criticizing is the easiest thing on the earth and the country expects better words followed by actions from learned men like you. I will appreciate your reply if you find time

Thanking you sir,

Email: paulkhajuria@yahoo.co.in

rakesh said...

you are saying right sir.Government wants to almost 80% people of india.I think india has no dearth of money but it is not properly utilised.I am student of NIT Kurukshetra. There is a huge fund available for the institute but it is misutilised.

SANJEEV RANJAN said...

well said sir.its an objectiveless budget. good to see your insight. more is allocated in the name of development but it goes to other's pocket..not a glance over the inflation where the common men are suffering. nothing could be sad than this by government.

Ruder Veer said...

Dear Sir
U always talk about the problem , not the solution . Please tell the solution , problems we know .As you have collected a very good data about the Indian but you have shown only the one side of the coin not the other side .
Well your views is very appreciable a

pankul gupta said...

no doubt that you have hit below the belt of GOI. though I don't know much about this budget but yes I would say that yours was a good way to criticise it.

GO Arindham GO!!!!!!

Ramamurthy said...

A thorough analysis of core points of the Union budget! I appreciate it. To be honest with my words, it has even triggered a strong interest to observe this Author's writings in the future. I express my hearty thanks for such a fabulous and fantastic article.

I wish to remind Mr. Saharsh DAMANI (for his comment on the article) that he has missed the core point of the article. Yes. There are, of course, many goodies in the budget but they are NOT meant for common man of India who shoulder this country. Author has only tried to bring this point to limelight.

Lack of distribution of growth is the culprit which almost our entire political leadership (intentionally or unintentionally) always ignore.

Amit Raj said...

Sorry sir, I am totally disagree with you. Do you really think Union budget is the place where we can solve these type of problems??
You are genius, you are called as economic guru, you know very well that some things can not be controlled by government..
Making comment on others is not the solution of any problem, instead we have to make a country where people will appreciate good works and support them to do better works...
If you really think people here are not eligible to make good budget, and not capable of doing their works, then you can also join politics and I am sure, you will be FM in very few months....
we young generation are always with you...
thank you

Ramakrishnan said...
This comment has been removed by the author.
Ramakrishnan said...

09.03.10.
(posted on 10.03.10.)

Dear Mr. Arindham Chaudhury,

I read your latest editorial in TSI reproduced in bottom section of your full page advertisement feature that appeared in The Hindu of today (09.03.10.).

Your piece of this editorial on budget practice straight away is a runaway hit. The supporting numbers & datas provided are appalling eye openers to a common reader such as me.

The fact that the annual budget exercises presented by the central and state governments year after year are just a formality and never an exercise of foresight and far-reaching are notorious truth that you can’t get away with.

However you or no one has pointed out on the outrageous gender discrimination on bottom-most slab on IT exception where I and many average family-leading men belong. Traditionally men are bread-winners and contributors to the family but I wonder why women get an upper hand here. But gratifying-prone politicians always will have a reason called women empowerment (this concept is nothing wrong unless it is implemented without depriving men) to keep a higher exception limit to the extent of thirty thousand rupees for women.


All well said by you in your editorial I want to ask you why you say this at all to a common reader and expect comments in return. A pretty girl wearing a pretty dress would want the most eligible persons to look her with awe. How in your case would want your concern over the 45C+35C people presently at thought and print translated level to be established on the long run and how would you aim to excel the honesty level of it to a near perfect state or simply contributing state. What is your motive? Honestly. Please could you tell us

Lastly I would want to share this piece of my personal writing with you:
DONATE HOPE NOT MONEY
All that a desperate person needs is hope, not money.
While Hope can transform a desperate one, Money always can’t.
Don’t wait until you become a Bill Gates to start Charity.
Start charity right now.
Charity isn’t about just money.
Start donating hope.
DONATING HOPE TO THE DESPERATE IS A SACRED FORM OF CHARITY.
Providing hope to its citizens is prime responsibility of any ruling government. It ought to do all it could into transforming that hope into a reality.
Thanks for your valued attention and would be glad if you might want to respond. Looking forward to hear from you.
Sincerely,
S.RAMAKRISHNAN.
Kikkeramman Layout,
Fort, Holenerasipur – 573 211.
HASSAN DT., KARNATAKA.
Email: ramakrishnan.santhappan@gmail.com
Mobile: 092420 94770

Naresh Bundel said...
This comment has been removed by the author.
Mamuni said...

Yes, it was a timepas for Pranabda.
The budget haven't gave any relief to aam admi. He said there's no price rise but rie in custom duty of crude oil and petrol will automatically rise the prices of consumer goods.Electric appliances become cheaper but India is suffering from shortage of electricity so, its of no use. Though, GDP might have gone up but growing BPL is a great matter of concern. Day by day competition is increasing but, today quality of education is gone down due to lack of proper facilities in schools.
If, government call it a progress in economy, so it's a progress.

Mamuni said...

Yes, it was a timepas for Pranabda.
The budget haven't gave any relief to aam admi. He said there's no price rise but rise in custom duty of crude oil and petrol will automatically rise the prices of consumer goods.Electric appliances become cheaper but India is suffering from shortage of electricity so, its of no use. Though, GDP might have gone up but growing BPL is a great matter of concern. Day by day competition is increasing but, today quality of education is gone down due to lack of proper facilities in schools.
If, government call it a progress in economy, so it's a progress.

HundReD said...

woh woh woh. lets stop here for just one minute.
while everyone is shouting blindly for the ''aam aadmi'', will anyone( yes any one), please take a minute out and explain to me ''WHAT EXACTLY DOES THE AAM ADMI WANTED, AND WHAT HAS NOT BEEN GIVEN TO HIM''?

Adi said...

@ Hundred : Let us start by what HAS been given to him, shall we? :-)

HundReD said...

@ ALL- the question is not as what he has got and what has not. But the question is what exactly he was looking forward to GET!! THE question is what was he expecting??
i think if we start with this question , then it will bring a good clarity to this debate! :) :)

paul said...

Sir, your statistics about unemployment rate, poverty, health care, education, give a clear idea about the pathetic condition of India today, everything is clear enough and of course we need a transformation at the macro level, these problems can be solved through macro level reforms and systematic changes and an intellectual like you know this. You cannot expect an annual budget to turn things around completely, but of course the budget could have been much more better than the current one, the budget should have addressed some immediate issues like inflation and other immediate needs of the ‘ aam aadmi’. The budget should be a balanced one, focusing on both the short term and long term goals. The untimely, tax relief for the top and creamy layer was unnecessary when the food inflation is too high. But, who is ruling? The great congress, they have the history of drafting budgets focusing mainly the corporate sector since 1991, only in the election year they would draft a budget for the ‘aam aadmi’, Because congress leadership strongly believes that only industrial growth can solve some of the basic problems of this country. Industrial growth of course would help in the long run, but simultaneously government should focus on immediate problems, like inflation and at the same time focus on the crucial issue i.e, human resource development (education, health care, nutrition, clothing, shelter) apart from investments in infrastructure. For the government, as backed by the corporate sector, this budget is a growth oriented one but, for the ‘aam aadmi’ it is a just another union budget as usual. Both the union budget and the sensex have nothing to do with the people at the bottom of the pyramid.

Thumbs up for your alternative budget ‘A Budget for Three Idiots’-great idea.

www.kerrypaul-paul.blogspot.com

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