Finance Minister Nirmala Sitharaman’s budget had no surprises. But none should have been expected given the limitations under which the budget was presented. It tries to boost falling growth with measures intended to strengthen domestic and foreign investments. But Sitharaman offers little to fuel demand and arrest the slowing consumption.
Don’t panic over unchanged defence budget. Need is for long-term strategic thinking
There is some disappointment over the lack of significant increase in budget allocation for defence in the post-Balakot phase. But defence continues to get the largest share of India’s total budget. Defence spending should be driven by long-term strategic thinking rather than tactical measures like acquiring more tanks and aircraft.
After watching Cut the Clutter. The facts that India is a status quo power and also a nuclear weapons power should both be leveraged to moderate increases in defence expenditure. Especially after seeing the deaths of children in Muzaffarpur, earlier in Gorakhpur, one feels the intense pressure to increase allocations for public health.
The government has no good options. Income tax relief for the salaried middle class was fully merited. Instead, for whatever it may generate by way of revenue, the rich are being soaked a little more. With the 8 – 9 % of GDP being saved by households being taken away as borrowings by the government, there is nothing left for private industry to pay for new investments. Assuming it would wish to make them in the face of tepid private consumption. 2. Sovereign borrowing abroad, denominated in dollars, is making the same assumption that drove Indian corporates to borrow abroad, tempted by lower interest rates, leaving them exposed to currency risk. Not a fantastic idea. 3. Seventy thousand crores for bank recapitalisation continues down a mossy, well trodden path, that leads nowhere. If power tariffs for farmers are not addressed, the discoms will continue to be in a hospital ward. 4. If other things are politically difficult – hona toh nahin chahiye, with so many divisions in the Lok Sabha – there should be a determined push to stop the haemorrhage from loss making PSUs.