Disappointment disinvestment and health are two important issues in the budget

- Aataapakarana Atapata: Dhawal Mehta

The biggest disappointment in the budget presented on February 1, 2009 is that there has been a slight increase in the budget for health. Another disappointment is that we have failed to get more money for public welfare schemes by disinvestment i.e. by selling loss making government units to private hands. BSNL has no place to sell. In the last budget, the finance minister had promised that the government would sell public property worth Rs 1,6,000 crore, but it did not materialize. If we want to move towards a welfare state, we have to make education and health services as free and high quality as the welfare states of Europe. In the last budget, the budgeted expenditure on health services was Rs 7,000 crore, but it has been increased marginally to only Rs 5,000 crore. This amount is less than one and a half or two per cent of our GDP while the western world considers health services as a huge expenditure up to 5 per cent of its GDP. A large selection in India, that is, the middle class or the poor, creates economic ruin in the family and hence the situation is not seen in the welfare states of Europe or the United States. The good side of this budget is that our direct tax amount, which was estimated at Rs 19.50 lakh crore in the first budget, has increased to Rs 13.50 lakh crore in the budget of 205-6 and indirect tax revenue (customs, GST and excise) is estimated at Rs 17.5 lakh in the last budget. It will increase from Rs 1 lakh crore to Rs 12.5 lakh crore in 206-2. This budget is considered as developmental and supportive budget for the next 3 years but in this budget our country's gross domestic capital formation is expected to be only 20% which was once reached 5 to 6%. How can a country increase its income without increasing Gross Capital Formation? The basis of more production is higher investment. We also want to be self-reliant in the economy, so in the 206-2 budget, concessions for 30 foreign goods that can now be imported under the concessional import tax will be gradually withdrawn.

Inequality 2

There is talk of economic growth and development in this budget but there does not seem to be any draft for economic equality. The budget estimates the fiscal deficit to be 8.5 per cent of GDP for 203-2. It was projected at 6.5 per cent in 2021-202. The government's intention to keep the fiscal deficit in the range of 6 to 8 per cent will not succeed in this budget. The government has to go into debt to cover the fiscal deficit in the budget. We have to pay huge amount of interest and principal payment for government debt from budgetary revenue. India's debt, which a few years ago was 40 to 50 per cent of GDP, is projected to grow to an estimated 40 per cent. Where would the money for education and health services come from if the government had to pay a huge amount of interest from government revenue? The government's reduction of the budget for MGNREGA in this budget is a step backwards for the public welfare government but it is a commendable step of the government to increase the budget for education from Rs 2,000 crore to Rs 1,080,000 crore. Our tax-to-GDP ratio, which was 10.31 per cent last year, will be marginally reduced to 10.8 per cent.