Monday, February 29, 2016

A quick look at the budget

Budget 2016-17 has evoked more than normal interest among the public. In turn, it has proved to be laudable in parts and laughable in parts.

Emphasis on rural development is overdue. At the same time, conscious omission of any reference to 'smart city projects' is self-defeating. It is noteworthy that investments in Asset Reconstruction Companies are encouraged by allowing sponsors to have even 100% ownership and permitting 100% FDI in ARCs. Throwing open Securitisation Receipts to entities other than Qualified Institutions bristles with risk to ignorant investors. Allotment of Rs.25,000 crore for recapitalisation of PSBs is less than peanuts in the face of more than Rs.5 lakh crore of bad debts.

Every new scheme will have a sunset date and outcome review. The government wants the rural income to double by 2022. Who will be in power then? The government is only pulling wool over our eyes. We are the eternally gullible folks.

Clean Energy Cess is renamed as Clean Environment Cess. Department of Divestment becomes Department of Investment and Public Asset Management. Massive reforms, indeed!

Rs.100 crore for celebrating 100th birthday of Deen Dayal Upadhyay and Rs.100 crore for celebrating 350th birthday of Guru Gobind Singh ! Whose money, yours and mine. We know the government misspends money. But so brazenly?

It may be good that the budget is political, but not populist. But it is bad that it is only a political document without much economic sense. Revenue deficit of Rs.3,54,015 crore to be met mainly through borrowings and not loan recovery or disinvestment is a sure indicator of continuing fiscal imprudence.

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