Politics, Economy, Asia - Pacific

India: ‘Opposition misleading people on budget’

India’s $66.9B expenditure budget fails to enthuse markets, investors

Cheena Kapoor   | 05.02.2020
India: ‘Opposition misleading people on budget’

NEW DELHI, India

Indian Prime Minister Narendra Modi on Tuesday cautioned against attempts being made to mislead people on the union budget.

Opposition and experts have been criticizing the budget unveiled last Saturday, saying it lacked boldness and foresight. Former Finance Minister P. Chidambaram said the budget did not offer concrete solutions to the challenges facing the economy.

Early on Saturday, Finance Minister Nirmala Sitharaman presented an expenditure budget wroth 32 trillion rupees ($449 billion) for the fiscal year 2020-21.

She claimed that the budget was focused to energize the economy. Investors have described government measures as timid.

After registering impressive growth of 8.2% in 2016-17, the Indian economy has since been on a declining trajectory.

Targeting critics, Modi said people have accepted that it is the best budget under the prevailing global economic scenario. He said attempts were being made to mislead people.

A business leader said the main income generation in the budget appears because of disinvestment and privatization moves rather out of taxation or investment.

“The figure (disinvestment) has doubled for this year. But we know what the track record of disinvestment last year,” said Naina Lal Kidwai, former president of Federation of Indian Chambers of Commerce and Industry (FICCI).

The finance minister earmarked 4.7 trillion rupees ($ 66.9 billion) for defense, stating that national security is a top priority of the government. Critics say it is a mere 1.6% of the GDP, lowest since the 1962 India-China war.

For modernization and buying new weapon systems, defense forces allocated 1.1 trillion rupees ($142 billion).

While Jammu and Kashmir region which is under lockdown over the past six months, Sitharaman stated that the government has approved an amount of 307 billion rupees ($43 billion) for development and other purposes for the year 2020-21. An amount of 59 billion ($8.3 billion) has been provided for the

central administered Ladakh, a territory carved out of Jammu and Kashmir last year.


Health, education bigger beneficiaries

The health ($96 billion) and education ($138 billion) have been major beneficiaries. But opposition parties say, it was far from an actual requirement to attend to the needs of more than one billion population.

What has caught attention in the budget is that the government has earmarked a huge sum of $55 billion to provide clean air. This is the first time such a budget has been allocated. No details are given as to how the amount will be spent to make the air clean. Many Indian cities are among the worst polluted in the world.
Amit Mitra, finance minister of opposition-ruled West Bengal province, said the budget has not addressed the GDP growth, which is at an 11-year low. “Private consumption is at a seven-year low. Investment is at a 17-year low. Manufacturing is at a 15-year low. Agriculture is at a four-year low. But none of these areas were addressed," he said.

He also claimed that there has been an 8.9% reduction in the allocations of agriculture, health and education sectors.

Expressing disappointment, Congress leader Rahul Gandhi said the budget has failed to address the critical issue of unemployment.

"The main issue facing is unemployment. I did not see any strategic idea that would help our youth get jobs. I saw tactical stuff but no central idea,” he said.

"Fall in core sector growth is serious; Budget fails to layout roadmap on how to address it. The budget is insipid, lacks stimulus for growth; no clear roadmap for job creation,” said Anand Sharma, a former minister.

Slamming the budget, Sitaram Yechury, leader of the Communist Party of India (CPI) said there was nothing in the budget proposals to alleviate peoples' misery, the growing unemployment, rural wage crash, farmers' distress, and galloping prices.

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