Prof. A.N.Sadhu
The Finance Minister presented the budget for the year 2016-17 to the state legislature on May 30,2016. There has been a sharp reaction to this budget from a wide spectrum of the society. Business fraternity has criticised it vehemently and overall reaction from other sections of the society has also not been in good taste. There were expectations that this year’s budget will be an innovative budget and budget with a difference because, for the first time, the state is ruled by the government headed by a woman Chief Minister, who is experienced in state political economy and is the daughter of a distinguished politician who played an important role in the state and national politics. Although the Finance minister has given due respect to the first woman C.M by announcing quite a few things aimed at empowering the women of the state but he has not given sufficient attention to other aspects of the state economy.
Let us examine the budget in some detail. Normally an annual budget should comprise of three components :-
(i) The performance of the previous year. Was the budget operationalised the way it was finally approved by the state legislature or have there been some deviations? What were the short comings witnessed during the previous year and how were these overcome or is the current budget presented in the backdrop of previous years legacy of these short comings. The state had adopted the practice of presenting an economic survey prior to the presentation of normal budget; why was that practice given up. The budget does not provide any explanation on this score.
(ii) The budget for the current year. This is a vital document enunciating the programmes for the year both on development as also on administrative front. It gives a detailed account of financial planning and the way in which it will meet the administrative requirements as also lubricate the wheels of faster development in the state.
(iii) Futuristic exercise. This part of the budget presents government’s vision of future development. It indicates the direction of state’s economic policy stating clearly its focus on future development programmes. It gives an outline of Macro economic policy delineating the specific initiatives, the state is planning to take for the development of different sectors in order to achieve an overall development of the state economy.
The budget that has been presented is more or less silent on first and the third components. It neither gives a clear picture of the previous year nor does it manifestly talk of the future course of development. The finance minister may need to give a fresh look to his exercise and make sure that there were no pit falls in the previous year’s budget while at the same time assure his people that state is well aware of the future developmental requirements and is planning in that direction for ensuring sustained as also accelerated development of the state.
Looking at the budget that is being discussed in the state legislature one finds that the detailed discussions Finance Minister held with various delegations, particularly with trade, commerce and industry representatives have not had any bearing on the preparation of the budget as a result of which there is an out cry against the budget and Finance Minister has already felt compelled to rollback a few things. Interacting with representatives of chamber of commerce and trade bodies, I found that they are likely to build more pressure to get several other things rolled back. I am afraid, that this budget may finally come to be known as a Roll back budget.
Of the total annual expenditure of Rs. 64,669 cr, the expected revenue is estimated at Rs. 61,681 cr. Leaving a deficit of Rs. 3000 cr.No details are given about how this deficit will be bridged. The striking feature of the budget is that state revenue will only be to the tune of as 23,737 cr which is about one third of the total expenditure. What are schemes, the government is envisaging to enhance the state revenue to reduce its dependence on external resources. This aspect needs a careful attention. Another striking feature is that pension amount of Rs. 23000 cr is more than the development expenditure planned for the year. This clearly shows that state is overburdened with government employment. In this situation there should have been a greater focus on generating alternative avenues of employment in the private sector. This aspect seems to have received inadequate attention while formulating the budget.
However, one cannot overlook the welcome features of the budget. These are mainly (i) focus on women empowerment (ii) Normative approach and (iii) Promoting ethical behavior in the administration. The fees waiver, setting up more women police stations, launching of women exclusive city bus service, 10 percent reservations in industrial enterprises are definitely very progressive measures in the direction of women empowerment. Women of the state will definitely rejoice having a women Chief Minister under whose regime they will always expect an adequate attention towards their welfare. Finance Minister has made a good start. One should take a careful note of the Finance Minister’s expression of having followed a normative approach while accomplishing his job of budget preparation. It is, however, not very explicit except perhaps his aiming at regularizing the 66000 daily wagers where he has clearly hinted at social and economic aspect of the problem. While as it is required to be done, it also demands that future engagement of daily wagers is thoroughly discussed and its desirability or otherwise assessed on economic and social aspects. While as normative approach is welcome, other associate aspect of the problem can also not be overlooked.
Finance Minister’s stress on ethical behaviour is equally welcome provided he makes a steady headway in this direction. When we talk of administrative ethics, Business ethics or professional ethics, it takes us to a more nasty problem of corruption. It also necessitates a clear distinction between classical ( colonial) model of administration and development model of administration. One would only wish Finance minister success in his efforts by sensitizing the entire administration towards building a corruption free administrative system in the state. We need to adopt objectively the development model of administration and inspire the people in the system to facilitate the process of growth.
Taxing milk products, common use gadgets such a cell phones, readymade garments, cable and hosiery items is not welcome. One can understand the compulsions of Finance Minister it would be expected of him to diversify the tax base which while enhancing the state revenues, does not prick the common man. Lopsided development programmes be avoided and a macro development strategy be adopted to bring about all round development of the state. Innovations and new thinking is always the need of the hour if we have reap the benefits of new world economic order.
Budget is a routine exercise; it is also an important exercise. It keeps the administration on right tract and serves as a confidence building measure among the people that the economy is moving in the right direction and they can hope for a better and comfortable tomorrow while at the same time feel confident of a safe and promising future for their progeny. The Finance Minister’s reference to normative approach should have dilated on his future programmes in some detail towards promoting a welfare state.
feedbackexcelsior@gmail.com
Follow our WhatsApp channel