EVEN AFTER CONCEDING that the Union Budget 2014-15 presented to Parliament and the nation on July 10 by new finance minister Arun Jaitley, is a truncated statement of accounts for the next seven months of the current financial year of the 60-days-old BJP-led National Democratic Alliance (NDA) government, it’s a great disappointment. There’s hardly any departure from predecessor budgets despite the people of India having “decisively voted for a change”, and the verdict of the electorate representing “the exasperation of the people with the status quo” as proclaimed by Jaitley in his 2.20-hour maiden budget speech. The exasperation of the people is that like his predecessors, Jaitley has failed to grasp that there’s more to the Union budget than mere presentation of a statement of government revenue and expenditure of the year past and a forecast of income and expenditure in the year to come. The Union budget is also an analytical and policy document which should take the people into confidence explaining why grandiose plans announced previously haven’t fructified, and identify the development priorities of the Central government. The finance minister’s speech fails on both these counts. According to the finance ministry’s website (www.indiabudget.nic.in), the Union government’s non-development expenditure (what it spends by establishment salaries, perks and maintenance costs) aggregated Rs.11.14 lakh crore in 2013-14. Against this, it mobilised Rs.9.77 lakh crore through taxation and Rs.2.12 lakh crore through non-tax revenue aggregating Rs.11.89 lakh crore as revenue receipts. To fund capital investments, it resorts to issuing high-yield interest bearing bonds purchased by the public. Last year, the Centre borrowed Rs.5.24 lakh crore, and for 2014-15 it has budgeted Rs.5.31 lakh crore. In effect, it prints paper money equivalent to these huge amounts (equal to the fiscal deficit) and injects it into the economy, fuelling inflation year after year. The result is that the cumulative interest payout of the Central government was a massive Rs.3.80 lakh crore last year (almost 40 percent of its annual tax revenue) and is budgeted at Rs.4.27 lakh crore in 2014-15. It’s patently obvious that a top priority of any government should be retirement of the Centre’s Rs.3.80 lakh crore (six times the Centre’s outlay for education in 2013-14) annual interest payout burden. An easy option on hand is to periodically stage global auctions to dispose of some or all of the Central government’s 251 bleeding public sector (business) enterprises (PSEs) and retire a substantial chunk of the public debt. There’s some awareness of this option and in his budget for 2014-15, Jaitley proposes to raise Rs.63,000 crore by selling equity shares of PSEs, a half-hearted measure given the assets of PSEs are estimated at over Rs.1000,000 crore. It’s a pity — indeed a national curse — that yet another government voted into office by the country’s desperate electorate is mired in the dreary desert sand of dead habit. Academy must resist saffronisation FEARS THAT THE landslide victory of the BJP in General Election 2014 would result in the influence of the Rashtriya Swayamsevak Sangh…
