Clear Intent

There was much thumping of desks during Finance Minister Nirmala Sitharaman’s budget speech on Friday. However, there was pin drop silence when she announced that tax surcharge would be increased by 3 percent for those who earn between Rs 2-5 crores and by 7 percent for those who earn above Rs 5 crores in a year. The crestfallen faces very clearly indicated what category of taxpayers almost all Members of the Lok Sabha belong to – all that talk of equity and socialism is for the consumption of the voting public only. The stock market reflected a similar sentiment immediately after. Jokes aside, this and other decisions exhibit the determination of the Modi Government to achieve objectives and obtain the means for them from every source. Having seen the result of the many flagship social welfare programmes directed at the poorest sections of society, particularly in electoral terms, the effort has already begun to put into gear the next tranche of measures, such as piped water in every home and housing for all. At the same time though, the commitment towards reforming the economy was just as visible in a largely incremental way. After having presented a picture that was interpreted as grim by many commentators in the Economic Survey on Thursday, the Budget was more proactive and upbeat. The Chief Economic Adviser, Krishnamurthy V Subramanian, had pointed out that the indicators could not be seen as existing in silos, but were part of a larger picture. All these elements have been knitted together in the budget in what may be described as well-considered intent. The Finance Minister has acknowledged the challenges, and some of the elements, such as boosting investment particularly from foreign climes, may be ambitious, but if objectives like boosting infrastructure, divestment of PSUs, reforms regarding ease of doing business and labour laws, etc., have the required impact, the objective of making India a Five Trillion Dollar economy can be achieved. There is also an understanding of India’s limitations when it comes to internally generated resources. Hence, the emphasis on export – be it skilled youth to meet manpower shortages in many countries, or marketing high technology such as space capability – makes eminent sense. Fresh initiatives have been taken to attract foreign manufacturers in several sunrise sectors, while efforts to boost start ups are also laudable. There is a sense of purpose in the budget, which has covered almost all sectors in a detailed manner indicating the meticulous effort and thought put into its preparation. It is quite praiseworthy that a clear vision and its implementation have been so quickly put into place in policy terms despite the fact that the government has just come in from a hectic months’ long election campaign. Quite clearly, the backroom boys have burnt the midnight oil to good purpose.