Friday, July 10, 2009

Budgetary bewilderments

Union budget analysis is one ritual that news analysts(of all sizes and shapes) in our country perform every year because it’s a tradition that we follow for many centuries though we don’t exactly know why we do it. Legend has it that this has been observed by news analysts from the time the first budget was presented by Kautlia when he was the finance minister in Chandragupta Maurya’s ministry in the 2nd or 3rd (or it could be 4th also) century B.C.

This author too is a big believer of the power of union budget because it’s the only thing powerful enough to increase the price of cigarettes and reduce the price of LCD TV at the same time. Unfortunately, this time around I missed the budget presentation and the entire pre and post budget tele-poisoning due to some other engagements and will not be able to give you a detailed impact analysis here. However, from my years of experience in analyzing budgets, I can do a quick review anytime, anywhere - even without any prior knowledge of the budget in discussion as well, here is how it goes.

Traditionally, budgets are events where some taxes will be cut while some others will be introduced so that the overall tax-weight of the country is balanced. This year also the tradition is followed, which you as an ‘aam aadmi’ would have already noticed. Also one key factor to note about budgets in India is that they are always pro-poor, growth-oriented and forward looking for you if you are a supporter of the ruling party, but will always lack ‘substance’ if your loyalties lie with the opposition. Though no economic theory explains this phenomenon, my conclusion is that it’s because nobody else is interested in it. Otherwise a third opinion sure would have been floated by now.

The most important factor you will notice about the union budget is that the finance ministers always carry the same brown suitcase when they come for budget presentation. This is also one of the reasons why opposition always say there is nothing new in this budget. I recommend the FM change the suitcase next time to a back-pack or something that’s more contemporary so that you can bring the opposition on your side to some extent. Else they will always keep shouting and screaming like a ‘responsible(for all the noise) opposition’, no matter how many benefits you announce for parliamentarians, ex-parliamentarians, their kith and kin in the budget.

Another main item(no number though) in any budget’s agenda will be to reduce the number of people living under the poverty line. The measures towards achieving this include a budgetary proposition to lower the line further so that more poor can jump to the other side. In the past also many poor who tried jumping over the line have broken many national records in that process, some even broke their own necks as well. It’s also worth noticing that this time the FM aims inclusive development, unlike earlier where we were looking for exclusive development. This in my opinion is a good move because a change is always good, look how Obama won the presidential election hands down.

Agriculture is one sector that will always get a higher amount set aside in every budget, I recommend we stop this because our agricultural production is always inversely proportional to the amount set aside Y-O-Y. Though this could be explained economically that the more money you set aside, the more will be ‘consumed’ by the babus and middle men, I would like to go superstitious on this because after all our entire agriculture sector depends on the divine intervention of rain gods. I suggest we set aside less money and more rain-pooja equipments for the agriculture sector next year on, and to ensure more religious coverage, set aside few Mullas and Pastors as well.

Then next big topic of budgetary discussion will be the amount set aside for uplifting our under performing Public Sector Undertakings or PSUs. I assume this year also the FM has followed the tradition of pumping more and more tax money into them because only then they can live up to their name – of being Undertakers of Public’s money.

I’m forced to wind-up this analysis here for two reasons. One that I’m an economically weaker science graduate to analyze it any further, secondly I’ve a solitaire game going on parallel and I find it much more amusing at the moment. But one thing that I would say is that this is not an inclusive budget as the government proclaimed, the FM missed out setting aside funds for many of the emerging weaker classes in our society such as homo-bi-a-trans-sexuals, young MPs, Ex-terrorists, LokAyukta victims, Left party general secretaries, Sania lovers…the list is long. That’s why I say this is not a complete, inclusive budget at all.

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