More hype, less vision in Budget 2019
RN Bhaskar — 6 July 2019
The budget 2019 papers have been tabled. And any person familiar with the heartbeat of the Indian economy knows that many of its prescriptions will just not work. The vision is missing, notwithstanding the ambition of making India a five trillion dollar economy.
Take two provisions first that ought not have been there.
First the additional duty on gold. Any gold dealer would have told you that gold smuggling has been increasing ever since the import duty of 10% was imposed on gold (http://www.asiaconverge.com/
2015/12/gold-smuggling-makes- our-rupee-poorer/) . The additional imposts will only make gold smuggling that much more lucrative. That will corrode the value of the rupee further.
Take the second provision – of allowing companies having a turnover of less than Rs.400 crore pay a corporate tax of just 25%. What will happen in reality is that a Rs.1,000 crore company will try and plit its activities into three entities – each having a turnover of less than Rs.400 crore. At a time when the Economic Survey talks of making companies bigger, the budget actually encourages companies to splinter and become smaller.
Take the vision front. The need of the hour was to create jobs and to reduce the adverse balance of trade. The fastest route to job creation would have been rooftop solar (http://www.asiaconverge.com/
2019/03/no-clear-focus-on- rooftop-solar/). This sector alone has the potential for crating some 80 million jobs within a couple of years. Instead, the budget is silent on this. What is worse, the safeguard duty of a crippling 25% has not been removed.
Take the other opportunity. There is a lot of lip service paid to Swachchh Bharat. But converting waste to energy would have done just that. It would have encouraged the prevention of open defecation and also allowed India to reduce its import of LNG. And anyone who says that open defecation is a matter of the past – especially in cites, needs to look at slums that have come over storm drains and nullahs. Toilets are designed to dump raw sewage into the drains.
Then take agriculture. The need to reduce water consumption, and bring greater value added into agricultural produce should have made the finance ministry announce subsidies for new technologies like hydroponics (http://www.asiaconverge.com/
2018/03/hydroponics-the- future-of-agriculture/), That would have reduced the use of water by over 60%, increased yields by over 300% and allowed for integration into food storage and food processing. Even this vision is missing.
The list is long. The expectations from this budget were high. India will have to wait another year till those hopes get revived.