Will the bud­get cre­ate a bang?

The 2015-16 Union bud­get will de­clare Modi gov­ern­ment's devel­op­ment agenda

Down to Earth - - LAST WORD - DOWN TO EARTH

TDemo­cratic Al­liance ( nda) HE NA­TIONAL gov­ern­ment will pro­pose its first full-year bud­get in hardly two weeks. Usu­ally, bud­get is the most sought-af­ter in­stru­ment to gauge the gov­er­nance and devel­op­ment agenda of a new gov­ern­ment, notwith­stand­ing the re­cent trend of gov­ern­ments mak­ing ma­jor pol­icy and fi­nan­cial de­ci­sions out­side the purview of the Union bud­get.

The bud­get for 2015-16 is im­por­tant for other rea­sons too. First, it will test the gen­eral per­cep­tion that the gov­ern­ment will cur­tail ru­ral devel­op­ment ex­pen­di­ture.Se­condly,the new bud­get comes at a time when there are ini­tial symptoms of a ru­ral eco­nomic cri­sis due to slow­down in the in­fra­struc­ture sec­tor in ur­ban ar­eas that sus­tains a large num­ber of ru­ral mi­grants.The bud­get will be the first oc­ca­sion when one can in­fer the gov­ern­ment’s ten­ta­tive agenda to avert this cri­sis. Thirdly, the bud­get with many strong fis­cal strings at­tached to it will be cru­cial to Prime Min­is­ter Naren­dra Modi’s flag­ship ini­tia­tives such as Swachh Bharat Ab­hiyan, Smart Cities and Health for All.It will be the first op­por­tu­nity for the 10-month-old gov­ern­ment to show­case its gov­er­nance agenda.nda has emerged vic­to­ri­ous in many state elec­tions since the Bharatiya Janata Party came to power.The bud­get is go­ing to lead the gov­ern­ment into its sec­ond year with sub­stan­tial work to fin­ish.

To start with, let’s cat­e­gorise the ex­pec­ta­tions from the bud­get into three as­pects: de­vel­op­men­tal, eco­nomic and po­lit­i­cal.With­out ma­jor state elec­tions in the near fu­ture, the po­lit­i­cal as­pect of the bud­get is limited to ad­her­ing to the de­mands of the states where new gov­ern­ments have taken charge, like Jharkhand, Ma­ha­rash­tra and per­haps Jammu and Kash­mir. On the eco­nomic front, the fis­cal deficit and tax cuts will be well within ex­pec­ta­tions.

The bud­get is cru­cial from the de­vel­op­men­tal as- pect. It is pre­ceded by key changes like scrap­ping of the Plan­ning Com­mis­sion and aban­don­ing the elab­o­rate (how­ever friv­o­lous it may be) con­sul­ta­tion with civil so­ci­ety groups for pre­par­ing the bud­get.The new body that has re­placed the Com­mis­sion is pri­mar­ily an ad­vi­sory group but with heavy state rep­re­sen­ta­tion. The bud­get may, thus, in­tro­duce changes in the Centrally spon­sored pro­grammes.The Union gov­ern­ment may em­power the states sig­nif­i­cantly to take de­ci­sions on how and where to spend Cen­tral devel­op­ment funds.

Mean­while,states have been de­mand­ing more say in the de­sign and im­ple­men­ta­tion of Cen­tral schemes, and the bud­get may oblige. Even though new pro­grammes may be de­clared with names suit­able for the gov­ern­ment’s po­lit­i­cal le­gacy,the states may get sub­stan­tial au­ton­omy to use the funds.This is com­pat­i­ble with the job de­scrip­tion of the new niti Ayog, which will just mon­i­tor im­ple­men­ta­tion of pro­grammes and eval­u­ate them for out­comes. The bud­get may be the be­gin­ning of what Modi used to em­pha­sise dur­ing his elec­tion cam­paigns— the “era of co­op­er­a­tive fed­er­al­ism”.

An­other high­light will be the gov­ern­ment’s treat­ment of two big devel­op­ment pro­grammes—the Ma­hatma Gandhi Na­tional Ru­ral Em­ploy­ment Guar­an­tee Act (mgnrega) and the Na­tional Food Se­cu­rity Act. Both will need huge mon­e­tary pro­vi­sions. But go­ing by re­cent de­vel­op­ments like de­layed wage for mgnrega work­ers and the Cen­tral gov­ern­ment com­mit­tee’s rec­om­men­da­tion to down­size the scope of the food se­cu­rity law, it will be a mir­a­cle if the bud­get makes fi­nan­cial com­mit­ments to re­vive th­ese flag­ship pro­grammes.

The fi­nance min­is­ter should care­fully lis­ten to the rather un­ex­pected sug­ges­tion of many in­dus­try as­so­ci­a­tions—spend on ru­ral ar­eas. Af­ter all, it is heavy public spend­ing on ru­ral devel­op­ment in the past decade that fu­elled ru­ral spend­ing, which has con­trib­uted sig­nif­i­cantly to the na­tional eco­nomic growth.


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