NEW DELHI, Feb 14:
Union Budget 2013-14 being the last full budget to be presented by the UPA Government before the Lok Sabha polls next year, people expect it to be a populist one doling out favours to net in the voters.
Expectations are varying between income tax exemptions being increased substantially to giving relief to the employee class aimed at encouraging industrial activity.
Political pundits say that the budget proposals are expected to set the stage for the UPA constituents to seek fresh mandate from the voters.
It is being put together at a time when the entire budget team of economists, including Prime Minister Manmohan Singh, are trying their best to bring the economy back on track or at least insulate it sufficiently against the tremors of global developments.
They say the fact sheet before the budget team of Finance Minister P Chidambaram is neither encouraging nor inspiring. Growth rate is down and inflation is showing no signs of coming down to manageable levels, fiscal deficit is and high, interest rates are coming in the way of rebound in the manufacturing sector.
Even the growing current account deficit at nearly 5.3 per cent is a matter of major concern.
On the political side ever since the Commonwealth Games the country has witnessed unprecedented emergence of corruption charges with several CWG administrators including a top politician being sent to the jail.
The magnitude of scams was so very big that voters could easily be convinced by the opposition that the economic crises are primarily because of rampant corruption.
Political observers and experts fear that the mood of the voters because of growing concern over security and lawlessness is likely to dent public support for ruling coalition unless it is taken over by positive developments important enough to impact the psyche of the common man.
In the given scenario, the Finance Minister’s team would have to take a razor edge walk while fine tuning the budget proposals. Considering the policy announcements being made by the core team, it appears quite certain that fiscal discipline would not be sacrificed for proposing a popular budget.
The experts are wary of the budget giving an impression that it was simply a popular budget. Such a scenario would further deepen the economic crisis and also hold back any possibility of foreign investment.
However, attempts to propose a growth oriented budget aiming at fiscal discipline are bound to be strongly resisted by the UPA and its partners as such steps are likely to affect their vote bank.
Economists say that current year’s budget calculations have gone haywire as the proposed revenue generation from both disinvestment and sale of spectrum would not be coming. Even the slowing down of the manufacturing sector is bound to hit the revenue targets.
Emergency measures are already on, plan expenditure has been drastically scaled down this year to neutralise affect to some extent. Politically sensitive decisions like FDI in retail trade have been taken as the flow of foreign funds into the country needed to be encouraged on an urgent basis, they add.
Economists are talking about negligible increase in the plan funding as meagre as 5 per cent while inflation has been around 7 per cent on an average. Experts fear that there would not be any major expansion of even flagship programmes.
This clearly means that any increase is unlikely even for Mahatma Gandhi National Rural Employment Guarantee Programme, regarded a major factor in the comeback of the UPA and the fate of other flagship programmes is bound to be no different.
Economic compulsions of the Government do not suggest expanded expenditure on development till the economy is back on track and more so on mere provision without any evidence of implementing agencies having capability to spend.
Indications are that in the current fiscal even most of the central Ministries may surrender 20 to 30 per cent of allocated funds. The Government has already taken a position on the output performance that expenditure realisation would form the basis for fresh allocations.
Pundits say the package of benefits currently being aimed at the underprivileged section is good enough to make them continue to repose faith in the UPA. They say the Government needs to ensure that the benefits are being delivered to the intended beneficiaries.
Economists say revival of investor confidence is of paramount importance to ease the panic among the business class.
Voters confidence is being regained through increased focus on direct transfer of benefits and a pilot programme for the same has already being launched. In the coming months, it seems more schemes would be brought in the ambit of the initiative to substantially reduce the misuse, delay and diversion of earmarked funds.
A major initiative of linking villages with national network to provide them services at the doorstep is already on. New initiatives aimed at benefiting SC/ST and minorities are being very closely monitored to ensure that this vital section of vote bank continues to have hope in the UPA.
The Government has already taken a position on the output performance that expenditure realisation would form the basis for fresh allocations. (UNI)
Trending Now
E-Paper
Follow our WhatsApp channel