Budget 2018 – The Good, The Not So Good & The Ignored
February 2nd, 2018
Image Credits: Money Control
No Budget in history can be said to have pleased everyone, and this one is no different. While the 2018 Union Budget claims to be allotting a lot of money for a lot of good work, it should be understood that allocation of money and actual usage of the money to complete the project in time frame are two different things.
- Education: The Finance Minister, Arun Jaitley while presenting the budget mentioned that even though more children are going to school, the quality of education is a concern. He claimed that Rs. 1 lakh crore would be invested for better infrastructure in education.
- Agriculture: The Government plans to spend Rs 14.34 lakh crore on rural infrastructure for various schemes. For better groundwater availability for irrigation in 96 deprived districts, Rs. 2600 crores have been allocated. farmers’ agitations in different parts of the country in the last six months, may have some relief knowing that the minimum support price for Kharif crops to 1.5 times of agri production cost—that is cost plus 50 percent.
- “Universal Health Care Dream: National Health Protection scheme has been introduced for the benefit of the poor and apparently 10 crore poor families to be benefitted from the scheme. In 10 crore families, and there would be more than 50 crore beneficiaries. Mr Jaitley claimed this would be the World’s largest government-funded healthcare programme.
The Not So Good:
- The Flagship National Health Protection Scheme as mentioned during the Budget 2018 speech is either to be a Centrally Sponsored Scheme (a scheme where both the Central and the State Government sponsor the scheme together) or a Center Sector Scheme (where the Center Government completely sponsors it on its own.). But neither the Central Sector Schemes Expenditure Profile 2018/19 nor the Center Sponsored Schemes Expenditure Profile 2018/19 mention any allotment for a National Health Protection Scheme. It is also important to note that The National Health Mission under Centrally Sponsored Schemes, has actually had its budget estimates reduced from its last estimate (Revised Budget estimate of 2017/18).
- During Union Budget for 2018-19, Finance Minister Arun Jaitley explained that out of the 187 projects for Ganga clean-up, 47 has been completed and the other projects are progressing. What he might have forgotten to state was that the 47 projects took almost 4 years to complete and even The National Green Tribunal (NGT) had in February 2017 rapped the government, saying “not a single drop of Ganga has been cleaned so far”.
- Among the comparatively smaller things, in the Indian dream of “roti, kapde or makaan”, where money has been allotted to “roti” (agriculture industry), “makaan” seems to have taken the hit. The Pradhan Mantri Awas Yojna, that is the “Housing for All” initiative, has seen its budget allocation reduced from last years revised allocation.
- Nirbhaya Fund: After no mention of it in the 2016 and 2017 Budget, the Government has allotted Rs. 19.75 crores for the scheme for the safety of women. What the Government perhaps refuses to acknowledge is that since the establishment of the fund not even 1% of the amount has been utilized. With the rising amount of crimes against women in and around the National Capital, the government could have come up with substantial solutions instead of merely allocating money.
- MGNREGA: MGNREGA’s allocation is lower than the statutory requirement, which would have required at least Rs 80,000 crore. Crop loss insurance, crop loss compensation, MGNREGA and irrigation allotment were not even mentioned in the speech of the Hon’ble FM.
- The Middle Class: The majority of the middle class working population may have been left a bit short charged. While revitalization of the agriculture industry is important, one wonders how Mr Jaitley forgot his own demanded to increase income tax slab from Rs 2 lakh to Rs 5 lakh. Maybe the Hon’ble FinMin was so held up doubling the salaries of Member of Parliament’s and making sure that MP’s salaries automatically adjust each year to take into account inflation, that he forgot that inflation affects others too.
- The Environment: This would be the second year in a row that the budget speech gave a complete miss to environmental concerns even though even though India’s green image has recently come under a three-pronged attack — a global report placed India third from the bottom on the Environmental Performance Index, lower than nations such as Libya, Iraq, and Afghanistan; the Economic Survey highlighted the risk that climate change posed to agricultural income; and the international scrutiny over air pollution.
The Government’s expenses, in comparison to the revised 2017-18 budget are expected to go up a whopping Rs. 2,24,463 Crore. So the question is, where is the money coming from?
An observation of the expected Tax Revenue projections shows that the Government expects to earn exactly Rs. 224463.24 crore more than it earned last year through Tax revenues, non-tax revenue and capital. Which is the exact same excess amount it is supposed to spend. The Budget estimates of tax, non-tax revenue and capital income for the year 2018/19 is far higher than it was in 2017/18. As good as the balance looks on paper, it is unknown on what basis the Government expects the sudden increase of tax and non-tax revenue this year.
It is also important to note that the current liability of Government of India by 31st March 2018 is Rs. 82,32,653.56 Crore and is expected to become Rs. 89,58,193.05/- crore by March 2019, that is an approximate increase of 8.81%.
While it is taken for granted that a Budget is a mere expectation of income and expenses and not the actual income and expenses which may take place, one wonders if the Government just signed a check it cannot cash, as this is the last Budget before elections.