Of, a buzz-less Budget and a fizz-less fiscal : Article by Dr. V P Singh

The plain speaking and hard-hitting Nirmala Sitharaman is likely to present an economically astute budget. There is neither much buzz nor would be there be any fizz in this budget. Interim budget had captured the buzz and provided loads of political fizz too. This budget has the opportunity of sorting out long term structural imbalances and fiscal anomalies accumulated from the past. The Index of Industrial Production (IIP) has grown at around 5% average for the decade which needs to be increased for creating adequate jobs and prosperity. Since Oct 2018, for five months it grew at 0.2 %, 2.5%, 1.6%, 0.1% and 0.4%. April 2019 saw it growing 3.4% which is better but not commendable. Unemployment is reported to be at 45-yr high of 6.8%. Allowing benefit of doubt in terms of changed methodology used this time in calculating unemployment, yet, the concerns about jobless growth are not new. Recall that jobless growth has been since UPA days. Agrarian distress has always been combated with doles. Emphasis now should be on removing long term structural weaknesses. A few days’ back Fitch lowered India’s GDP growth forecast from 6.8 to 6.6 % for 2019-20. Before that IMF had lowered the forecast from 7.5 to 7.3%. Government has gigantic task at hand in correcting the anomalies of forcing growth over the last several decades. The reduction in corporate tax, from 30% to 25%, up to Rs 250 crores turnover has benefitted all the small and medium enterprises.

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