In the month of the budget…

In the month of the budget…

‘The more things change, the more they stay the same’ – the epigram by French critic Jean-Baptiste Alphonse Karr rings true each year after the budget is announced. This year, a long standing tradition was broken and the budget was presented on February 1 instead of the 28th, but even then, little changed.

An email was doing the rounds before the presentation of the Union Budget and it predicted the following reactions to the Budget:

BJP: Path-breaking, pro-farmer and will help the last person in society

Congress: Anti-poor and will increase inflation

Shiv Sena: Anti-Maharashtra, failure of BJP and the PM

CPI & CPM: Will serve American interests and will result in mass unem­ployment

JDU: Nothing special, wasted opportunity

RJD, TMC, BSP, SP, etc: Poor and downtrodden will suffer more

AAP: For the benefit of Adani and Ambani

CII, Assocham, FICCI: Will kick-start economy and encourage private investment

NDTV, India Today, Network 18, Aaj Tak, ABP: Nobody seems to be happy, likely to create problems for the Government

Times Now, Zee, India TV: Great bud­get will help BJP in elections

The point is simple. In a country as large, diverse and resource-starved as India, irrespective of what the budget contains, these reactions will ring true. In the last 20 years of observing the budget as an economic and political analyst, there hasn’t been a single one that has been unanimously praised. I think there might have been some unmitigated disasters though!

In recent years, there has been an effort to reduce the hype around the budget, and take away the pressure of ‘big bang announcements’. The intent has been to move to a system where important measures for the economy are taken in a timely and consistent manner throughout the year. The budget then becomes a bellwether for government thinking for the future as opposed to a gigantic transformation alert. But our expectations haven’t changed accord­ingly, and newspapers and television channels still spend their space ad nauseum anticipating, understanding and then dissecting the budget. CFO India succumbs to some degree as well!

But if we were to try and get beyond the budget and focus on movements in the economy – there is much to feel hopeful for. Apart from some of the highlights like streamlining political funding, focus on agriculture, attention to mid-sized companies, digitisation, and a series of tax benefits for low income groups – the budget suggests enhanced spending without any increase in taxes, which is a luxury afforded by an ‘under control’ fiscal deficit. Even bigger, in my opinion, are some of the other fundamental changes that are underway.

More than 100 crore Aadhaar cards have been issued; 50 per cent of these are already linked to bank accounts. The Prime Minister has approved a move where all savings banks accounts will be linked to Aadhaar numbers in the next few months – that’s close to 80 crore! What does this mean for India’s financial services sector? What about bank branches, the payment industry, MFIs, and what does it mean for overall digital security? The same is the case with how government services will get delivered to marginalised seg­ments given their inclusion into the formal payments system. What does this mean in the long term for trans­parency, and perhaps, tax collections?

We are sitting at the cusp of tectonic shifts in the way we are organised. We must look at much more beyond the budget to feel the good, the bad or the ugly. That’s my view. But what do you think?

Anuradha Das Mathur, Editor, CFO India