Finance minister Arun Jaitley passed his litmus test with flying colours on Monday. If he earned kudos from economists for massive spending proposals for rural & infrastructure development while sticking to fiscal deficit target of 3.5%, political class acclaimed it for taking care of the poor, women and weaker sections.
If the middle class was mildly taxed, the rich paid a heavy price. The budget was so cleverly drafted that the corporate sector couldn't grumble either despite being pinched during these depressing times. But Jaitley proved his mettle as he has come of age in North Block. He softened the Congress by making a mention of Rahul Gandhi in his budget speech and accepting one of his suggestions for a tax rebate. Former J&K chief minister Omar Abdullah summed it well when he commented, "By not focusing on the suit boot people, Arun Jaitley has cleverly made the Opposition"s job a bit tougher."
It turned out to be correct as former Prime Minister Manmohan Singh was hardly critical of the budget and termed it "a nit-picking budget. There is no big idea except promising to double the farmers" income in the next five years. I think it is an impossible dream."
It was rare that veterans in the party praised Jaitley too. L K Advani said, "Have seen many budgets being presented in Parliament. The one presented by finance minister Arun Jaitley is certainly one of the best so far." Yashwant Sinha also commended the Budget saying, "Yes finance minister has passed the test".
It is clear that the third budget of the NDA-II has clearly moved towards focusing the rural and agriculture sector and from cities to villages as it may sow the seeds of buoyancy in the rural market. The PM has laid emphasis on rural road, rural electrification, MGNREGA, all subsidies only for people living Below Poverty Line (BPL) including LPG gas for BPL women.
The calculation is if the buoyancy picks up in rural sector, economy will grow and will tame the inflation. By spending on infrastructure, Jaitley has also signalled to RBI governor Raghuram Rajan to cut interest rates now.
As stated earlier in Lokmat Times, Jaitley introduced a scheme to unearth black money for the domestic tax evaders. Of course, the 45% flat tax rate is un-attractive and one will have to see if this would bring in thousands of crores to the exchequer. He also focussed on settling long pending tax disputes before tribunals and courts by offering one time solutions. There is no doubt about the stamp of Narendra Modi on the budget as major focus is to bring down corruption in the bureaucracy in the income-tax, excise and customs departments under the finance ministry itself.
It was rather surprising that Jaitley did not mention even once the defence sector while praising other areas of priorities like power, roads and railways. The budget was so cleverly drafted that the corporate sector couldn't grumble either despite being pinched during these depressing times.
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