Saturday, February 28, 2015

Arun Jaitley's Budget 2015 mixes populism with difficult stimulus measures, very much a Congress formula

The Congress leaders are very angry with Arun Jaitley's Budget because it seems that he has stolen the thunder of Congress populism. He has shown enough empathy, sympathy, concern for the poor people. The Congress people think that no one can think of the poor people as much as they can do. It is a myth that has been broken earlier as well, but this time the concern for the poor goes hand in hand with pro-market measures as well. It is the kind of Budget that P.Chidambaram would have presented, and even former finance minister Pranab Mukherjee. So, the Congress argument that the Jaitley Budget is anti-poor does not hold good.
There is another way that Jaitley did what a Congress finance minister enjoys doing: public investment. Jaitley had no option but to focus on public investment because there is no other way that infrastructure projects will get off the ground. As a matter of fact, the captains of industry are disappointed with the Budget proposals because he did not offer on the platter any big projects by way of public-private partnership (PPP) projects. The Economic Survey, and the Mid-Year Economic Review, had highlighted the problems with PPPs. Though he had announced five ultra-mega-power projects (UMPP), they fall into the public sector segment.
Jaitley paid much attention to start-ups and entrepreneurship, and he has also provided for start-ups by the Scheduled Castes and Scheduled Tribes. It is something that Congress would have wanted to do and would have done. It was a calculated move on the part of Jaitley, and Prime Minister Narendra Modi, to occupy what Congress leaders believe to be their turf.
Another major idea in the Budget is that of universal social security through insurance and pension funds. Congress would never have wanted to do universal social security because it always plays politics in welfare measures, targeting the SCs, STs and the minorities. Jaitley has pegged it to the the rural folk, to the aged and to those below poverty line.
Jaitley's budget is based on the hope that investments will flow and economic activities will pick up. There is no rationality behind it. It is based on expectations.
Removal of wealth tax, reduction of corporate tax from 30 per cent to 25 per cent, and the imposition of 2 per cent educational cess, and the 2 per cent surcharge on the super-rich are administrative moves done to improve the efficiency of tax collection.

In the Lok Sabha

Jaitley wore a blue shirt and a dark blue Nehru jacket and blue trousers, the semi-formal/informal that Delhiites prefer but which gives thee impression of not being serious about the occasion.
He walked up to the Opposition bench in the mornin, talked to Samajwadi Party leader Mualayam Singh Yadav, Congress leader of the House Mallikarjun Kharge, and talked to them briefly. He smiled and acknowledged to something Congress president Sonia Gandhi said. Senior Congress leader Kamal Nath also joined the tete-a-tete. Then he walked back.

The front row of the Treasury bench was occupied by prime minister Narendra Modi, home minister Rajnath Singh, minister for external affairs Sushma Swaraj and BJP patriarch L.K.Advani and minister for road transport and highways Nitin Gadkari. The lectern for Jaitley was set up at the second place from the other end. One of the House staff also put a mike-lapel to his jacket.

He started reading the Budget speech standing. After 15 minutes, Speaker Sumitra Mahajan suggested that if he wanted he could sit down and read. Jaitley said that he would do so when he felt the need to do so. About 20 minutes into the speech, Jaitley decided to sit down. Gadkari moved back to the fourth row and Jaitley sat in the corner and continued to read the speech. He stood up at the end when he commended the Budget to the House and moved the Financial Bill.

After the Budget speech, Modi went up to him and shook hands. Jay Panda of Biju Janata Dal and minister for consumer affairs Ram Vilas Paswan went up to him, and so did senior party leader Murli Manohar Joshi. Minister for water resources Uma Bharti seemd very happy with the Budget. She was seen engaged in an animated conversation with Modi after the Budget speech.

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