by Harish Gupta, National Editor, Lokmat Group
Jaitley's Tryst with Budget
By : Harish Gupta
As
India's
Finance Minister Arun Jaitley is set to present his maiden Budget on July 10,
Prime Minister Narendra Modi's voters and opponents are waiting with a baiting
breath. The past one month has been Jaitley's most difficult period of his life
and tension is visible on his face. It's a historic day not only his political
journey spanning 40 years culminating in emergence as Modi's virtual number two
man. So spectacular has been Jaitley's rise in the Modi government that he has
more enemies within his own party than outside. He not only hold charge of
Defence and Corporate Affairs ministries. But half a dozen ministers handling
economic ministries report to him. Yet, a walk in the Lodhi Gardens
is a thing of the past for him and one could hardly find him smiling. His
situation is of a producer whose mega-budget film is ready for release and he doesn't
know how 125 crores Indians will take it. Major financial Capitals of the world
are also looking for the 90-minute documentary, produced by Arun Jaitley and
directed by Modi, to be presented in the Lok Sabha on Thursday noon.
The
hike in rail fares, petrol, diesel and sugar prices may have dampened the
spirit of the Indian "middle class". But the hopes for "achchhe
din" are alive and kicking. So intense is the faith of the people in Modi
that his call asking countrymen to get ready for the "bitter pill"
was also drowned in the sea in Goa. There is
no stopping of the Nifty & Sensex touching one peak after the other and
FIIs pumping million of dollars in the Indian share market. The Chinese are
waiting with their $500 billion investment plan and so are the Japanese. The
SAARC as a whole is being marketed by Modi as one unit and Union Budget has to
reflect this Modi vision.
Jaitley
is also flooded with a huge 'wish list' pouring in from all over in his
out-of-bounds North Block office. If corporate houses want re-scheduling of
Non-Performing Assets (NPAs) worth Rs 3 lakh crores and waiver of interest
& penalties, PSU banks want huge Capital infusion. Plus, they want written
directions from the government before re-casting these loans for fear of the CBI.
The subsidies and "mindless populist schemes costing another 5.25 lakh
cores per annum is giving sleepless nights to Jaitley who even otherwise sleeps
for four hours only these days. The all-around demand for meager 10 per cent
cut in subsidies under the given circumstances will be a miracle. The El Nino
continues to be the biggest threat to the Modinomics and put Jaitley in a tight
spot. The rising prices of essential commodities due to supply side issues
continues to be a worrying factor and no amount of long term steps will help
the "Achchhe dinon ki Modi Sarkar" during this short-term crisis.
Plus, Jaitley also has to ensure that his Budget doesn't hurt the prospects of
BJP in Maharashtra, Haryana, Jharkhand and
elsewhere going to polls in mid-October-November.
The
power, coal and mining sector is clamouring for relief and Air India is
demanding Rs 8200 crore revival package again. The Railways want Budgetary
support of Rs 25000 crores as Minister Sadanand Gowda "hamesha anand mein
rahatein hein." (The Railway Minister is always enjoying whatever may be
happening, Modi said in Uri). Jaitley's predecessor P Chidambaram had done some
jugglery in Budget proposals last year to the tune of Rs 45000 crores. He got
the banks to deposit Rs 20,000 crores as TDS in advance which was actually
payable only after March 31, 2014. The shortfall in the revenue earning of Rs
15000 crores was not reflected in the revised estimates and petroleum subsidy
of Rs 10,000 crores was not shown either. When someone suggested to Jaitley
that he should bring out a "white paper" on the status of the
economy, he candidly said, "You want me the world to poke fun at us that
we fudge figures !".
Modi sold hope
to the people.
Its
FM's turn to deliver
The "wish
list" is unending if one goes by the flood of articles splashed in
newspapers and discussions on TV channels in the run up to the Union Budget. If
economic experts want Budget deficit to be kept at 4.1% at any cost to avoid
downgrade by world rating agencies, the ailing farmers want loan waiver in Maharashtra and elsewhere. The industry want excise duty
cuts to revive the manufacturing sector destroyed during the UPA due to policy
paralysis while Health, Education, Urban Development ministries want huge
budgetary support to keep promises made by Modi during the election campaign
and in the BJP manifesto. The gas price hike issue can't be pushed under the
carpet indefinitely and Budget has to give a clue to the problem. Fortunately,
the Iraq
crisis is subsiding bringing the prices of Brent Crude down. Yet, the subsidies
bill is on the rise. The "10 commandments" containing dos and don'ts
for Jaitley by an Economist doesn't give instant solution to Jaitley's woos.
The Swadeshi Jagran Manch, an RSS affiliate body functioning as watchdog, has
prescribed its own medicine to revive the economy. Surely, Surely, Jaitley will
lose sleep further if he is bogged down in the numbers.
Modi has suggested an out-of-box thinking and innovative ways to push
growth to 6%, an ambitious target during this fiscal. Jaitley’s problem is no
one has come out with a plan to generate more revenue since everybody has a
wish list and nobody wants to be taxed. The middle class want super-rich to be
taxed and bureaucrats want to raise the service tax to 14% from the 12% at
present as 67% revenue comes from the service sector. The NDA may have set up
SIT to get black money from abroad. But its a mirage because 75% of it is
within the country through the P Notes route and in real estate. A couple of
innovative schemes alone can give Jaitley the most sought after breather. Modi sold
“hope” to the people. Its Jaitley’s turn to deliver. Its Jaitley’s tryst with destiny. Its make or
break for him. Watch out !
(The author
is National
Editor
of Lokmat Group)
