Budget 2014: 'A Tightrope Walk' by N.K. Singh
N.K Singh, a noted economist, concedes the maiden Budget of the BJP-led government may well be a tightrope walk for the Finance Minister.
An assiduous approach, backed by astute decision-making, has helped the government set the agenda for economic revival. And changes may just be beginning to trickle in! The market sentiment is showing positivity and the Sensex has shown ‘record-growth’
First a below par monsoon would definitely have implications on national food security, inflation, rural employment, purchasing power etc. Second, the continued uncertainties in Iran are shadowing petrol subsidies. Besides, unattended debt, draining treasury, subsidies spread too thin, and dilapidated growth have added up into challenging roadblocks, writes N.K Singh.
Considering the challenges and the fact that it is a short-term budget of seven months, the government should attend the most pressing issues, like reviving the saving and investment cycle, upfront. Impending debts, depleting revenues, spiking expenditures, and sluggish export are some persistent concerns which will be detrimental to the economy in long term. So, a balanced approach to combat these issues and restructure the economy has got to be devised.
The revival of the Public Sector is long overdue and seeks massive reforms. Public Expenditure Policy needs revamping to bring the expenses under reasonable norms. Further allotment of fresh and larger funds is not a solution, but root level weeding is required. Pending projects which are proliferating in net expense should be finalized and transparency in systems should be maintained to promote Public Sector investment, an imperative for development.
Revenue and tax administration should be improved in a way to cater to general sentiment while maintaining revenues. The apprehensions about whether the budget is applicable from the start of this fiscal year or will take effect from now should be resolved at the soonest.
A definite timeline to put GST into effect is a must. Also, all sides should be consulted over Direct Tax Code. Income tax slabs should also be redefined considering inflation and the common man.
Ownership laws should be reoriented to ensure maximum reach and effect so that they protect rights of the needy. Labour laws, food security bill, Mahatma Gandhi National Rural Employment Guarantee act etc. should be restructured to minimize loopholes.
Nand Kishore Singh writes Budget 2014 is not linear. It has its complexities and challenges. Beyond the accounting of expense and revenue, critical balance should be maintained between priorities and options. The Finance Minister is faced with limited alternatives and an expanse of challenges, but hopefully, he would come across with an offering favourable for all.