Union Budget 2023-24 is carefully crafted aiming to cultivate voters of nine States going to polls this year with largess dumped on agriculture, infrastructure and projects. Prime Minister Narendra Modi is right that the voter wants the glitz of infra in every field. It is a politically paying proposition whether there are jobs or not. And, Finance Minister Nirmala Sitharaman has been euphoric in announcing programmes. In her briefing to the media, she said without any qualms: “Yes we are a political party and do it for political purposes”.
The perky five-step income tax is good up to an income of Rs 12 lakh. Beyond that it is rigmarole and even causes higher tax outgo for individuals. Most vocal are the intellectual groups within the BJP. Some experts say no income-tax up to Rs 7 lakh is a misnomer with confusing new and old schemes. There are views that if corporate taxes could effectively be at 15 per cent, the highest I-T should not be more than 20 per cent and not 39 per cent as of now with various kinds of TDS including foreign remittances. This hurts the farmers too. So, a political budget needs more caution. Mere doling out is not enough.
Insofar as infra investment is concerned and in the wake of natural disasters in Uttarakhand and severe flooding of various States, the necessary review and check has been regrettably avoided. This means the risk to the hills and fragile areas continues. It is time to put a pause on roads after hitting over 7 lakh km of highways and rail projects turning into shopping malls. Little is learnt after failure of such metro projects in Delhi itself.
Effectively it means that on the global pattern capital expenses are to go up to Rs 13.70 lakh crore, Rs 3.20 lakh crore more from Rs 10.53 lakh crore of 2022-23. It comes almost all from Rs 17.86 lakh crore of borrowings up by Rs 1.20 lakh crore. Borrowings are almost 40 per cent of the total budget of Rs 45.03 lakh crore.
This is clearly questionable. Infra is required as per needs but sudden expenses’ increase yet again now in railways and roads may lead to gradual financial and economic problems and burden the future generation. Further, not only Joshimath but even the plains are now at risk. Let us look at Thailand’s unfinished projects since 2000.
All this has created private sector dependence on the government. It strangely leaps as the government shells out from its own coffer. The infra spending has too many contras. Interest payments and unutilised programmes burden future generation as well. Capacity utilisation has reached tipping point — 75.3 per cent, the Economic Survey says. There are cautions also in view of the global slowdown and rising inflation. This lowers private investment.
The Himalayas sinking from north-west to north-east should have called for debate and discussion on re-fixing the path. Even various airports and other constructions as announced call for review of the destruction of aquifers leading to a severe water crisis in the Ganga Valley itself. Wherever supposedly investing, the private sector is in reality fleecing the people – road tolls and higher service costs are such instances.
The US and other western countries developed infra gradually as and when their finances improved. America has given up hi-speed corridors and is strengthening the existing 260,00 km route almost double of India. Japan’s showcase hi-speed train has severely hit its uncomfortable lifeline railways. Queerly the government is to fund junking of cars instead of doing away with the programme.
There is a galore of Amrit Kaal programmes right from incentivising savings for women to virtually every aspect that benefits farmers, wooing a strong chunk of powerful voters with over Rs 15000 crore schemes. These are: Gobar-dhan gas plants, natural farms, PM-Pranam alternate fertiliser; digital public infra for agriculture (questionable as 4G and 5G), which eliminates many fauna like bird species; agricultural accelerator fund; enhancing cotton crop; Atmanirbhar Horticulture Clean Plant; Shree Anna–Global Hub for Millets; Green Growth fuel energy efforts; Rs 6000 crore fisheries (Rs 1000 crore less than last year) and higher Rs 20 lakh crore agric-credit for animal husbandry, dairy and fisheries. New massive storage capacity creation, requiring heavy corporate involvement, is also planned.
Looks good but while millet has higher production in the north, the research institute is set up at Hyderabad in the south. Jowar, maize, sama was part of the staple till the Green revolution in 1960s. Popularising it again with creation of such taste buds is time-consuming. Market increases as taste develops. The economy of scale creates remunerative prices for farmers. How will the farmers get attracted to new crops needs to be watched. Even food producers are not finding every bit workable as it needs reworking the recipe.
It may be recalled that this year, the kharif rice production is reduced by 6.2 per cent to 146 million tonnes, oilseeds by 8 per cent -21.97 million tonnes, sugarcane by 0.79 per cent, groundnut by a million tonnes, as well as losses noticed in maize, soybean and urad. Quite a bit was lost due to heavy rains and because of a decline in 0.8 per cent acreage. Road and rail construction is eating up fertile lands. Farmers even in Haryana are agitating against road construction.
Still 17.25 lakh farmers have benefitted from MSP payments though for various coarse crops these are virtually on paper. The government’s Situation Assessment of Agricultural Household in Rural India has found that the best deal farmers could have from are Farmers Production Organisation (FPO), APMCs, maligned by vested interests. The open or corporate market does not ensure prices or sustenance. This shows that farmers’ stir was on its path and corporate needs to mend its ways. One reason BJP lost the Himachal Pradesh election was corporate monopoly of apple business causing heavy losses to growers.
It also needs to rectify and strengthen the APMC and government-run silos. Krishi start-ups are fine, but the new tax regime may be a dampener for investors as it virtually leaves no one untouched including foreign investors.
A lot remains as government’s agri extension system has not helped create skilled farm entrepreneurs. The apprenticeship scheme reinforced remains since the 1970s, but it has found less favour with private companies.
With too many programmes and acronyms the budget has missed out on creating the necessary mix of corporate, people and the farming class. It is also evident it cannot move out of APMC type marketing and now it has to move out of infra obsession for more inclusive improvement as development has become a cliché.—INFA