Well done, Mr Jaitley! At least you tried
be expected to take more credit when so many of them are committing suicide because they cannot repay what they have already borrowed? Besides, most farmers are at the subsistence level. It is a moot point whether they even have the requisite legal collateral to avail of such loans. And what impact increased lending in this form will have on banks already overburdened by NPAs, is another matter.
Third, the FM repeated in his Budget speech the goal, articulated earlier, that farmers’ income would be doubled by 2022. But although the goal sounds impressive, in reality it means very little unless much more is done. According to the National Sample Survey, average annual income of median farmers, net of production costs, is currently around `20,000. If in five years this is doubled, it would mean they would earn `40,000 or so, which amounts to `3,500 a month, and not even that if inflation is factored in.
A fourth question relates to jobs. Has the Budget created the incentives for a substantial growth in economic productivity that could translate into a quantum increase in jobs? While we have improved our standing in the World Bank Ease of Doing Business report, we are still — as the report itself says — unacceptably lagging behind in key sectors. For instance, we are at 156 out of 190 countries in the vital area of starting a business, and at 181 in registering a property. The government claims — on the basis of a controversial recent report by two economists — that it has created seven million jobs in the formal sector of the economy. This hardly appears to be realistic. Mudra loans may have helped some entrepreneurs, but the average loan offtake under this scheme is around `50,000 per beneficiary, hardly sufficient to start or sustain a new business. Moreover, according to most economists, one job created in the formal sector leads to two in the informal sector. Have we then created 21 million jobs? On an average, there are 12 to 15 million young people in the job market. Are we then in a position of overemployment?
Fifth, it was the expectation of many least developed states, that the Budget would have special measures for their development. Bihar has been asking, on very reasoned grounds, the granting of special category status. But such expectations were left unfulfilled.
And finally, the ambitious health coverage scheme up to `5 lakhs each to 50 crore people, is an audacious one, but where is the money for its implementation going to come from? The Budget certainly does not indicate this. Apart from the cash component, there will also be huge infrastructure costs. Currently, our healthcare system is short of doctors by 72 per cent; we have only 50 per cent of the nurses we need and laboratory technicians are 80 per cent less than required. The allocation to public health has gone up only marginally, and in fact, as a percentage of the Budget is less than that of last year. We wish the FM well, but for this he may actually need a magic wand! The writer, an author and former diplomat, is a member of the JD(U). The views expressed are personal.