Here’s How Experts & Analysts Rate Jaitley’s Union Budget 2018

Top opinion pieces you must read on Union Budget 2018.

Union Finance Minister Arun Jaitley presented the Union Budget 2018 on 1 February.

(Photo: The Quint)

Most Credible Thing About Budget Was Government Acknowledging Its Nervousness

Noted critique and academician Pratap Bhanu Mehta, in his column in the Indian Express, commented that the budget reflected a "familiar tension" in Indian policymaking – in its attempt to respond to "genuine democratic pressure and economic need".

He commented that the the government's proposal to address the crisis in healthcare and agriculture were "economic imperatives" and not “populist measures”. However, he pointed that the budget still questions whether India has a "coherent economic framework or institutional architecture" to realise these promises.

The three "tensions" that the government tried to bluff its way through, Mehta pointed, are:

• The rural-urban tension
• Tension between public and private, especially in the social sector
• Tension between Davos Man and Make in India

The good thing is that health is now becoming a political imperative, but we are still sleepwalking into delivery architectures without serious regulatory capacity. The tension between the promise of public investment and the architecture of the state is manifest in other areas. Public investment in infrastructure has energised some sectors. But in others, like Smart Cities, the gap between committed outlays and actual utilisation is quite wide. The budget speech was perhaps wisely taciturn in not trumpeting the results of past commitments of this government to investment too loudly.

Union Budget 2018 Unlikely to Improve ‘Ease of Living’

The Union Budget 2018 is one that can be labelled as a “new and evolving” political statement, but it’s one that is unlikely to better the ‘ease of living’ for citizens of the country, wrote Yamini Aiyer, in her commentary published in LiveMint.

President at the Centre for Policy Research, Aiyer wrote that it was about time that the budget focused on the needs of agrarian, rural India. But this focus is expected, she commented, pointing that it was “interesting” the way a narrative is being constructed.

Gone is the focus on jobs, skills, aspirations and empowerment. The rural economy is to be strengthened through greater government welfare intervention. Improved rural infrastructure (particularly sanitation, housing, roads) and — the showstopper of this budget — health insurance are the key focus. Achievements against these schemes are likely to frame the political message that the National Democratic Alliance (NDA) is going to take to the people in 2019. Important here is a clear admission that the primary political promise of this government — better jobs for an aspirational India — has failed. There is now a new promise that is being slowly constructed.

Aiyer feared that the government’s mega health insurance scheme ran the risk of creating the “world’s largest, unregulated public-private-partnership” which might lead to no significant impact.

Bold On Vision, Short on Outlays

Senior journalist and an Editor with the Economic Times, TK Arun in his newspaper column opined that the budget indicated that it meant to “assuage the angry voter”, especially after being “nearly” voted out of power in Gujarat.

While he termed the outlays as “bold” – especially the one allocated for health insurance scheme – Arun questioned how the government is planning to fund the same.

The government resorting to additional cesses, which are not shareable with the state governments, leaves more money in Centre’s hands, he pointed.

It helps to tell angry rural voters that fat cats of the capital markets are being taxed to pay for new welfare schemes. Improving education and healthcare is not a technological fix, but a political challenge in which the Centre and states have to cooperate. Higher MSP for farm produce are no panacea. India’s farm prices cannot be completely out of line with global prices. The task is to help farmers realise a greater share of the value that is added to their produce before it reaches the consumer. 

With Spendthrift New Budget, India Takes a Wrong Turn

While one can argue how much Prime Minister Narendra Moodi has accomplished since he took over in 2014, he maintained his “fiscal restraint” until Budget 2018, wrote Mihir Sharma in his column in Bloomberg. This, he pointed, led to disappointment of both the bond market and equity investors.

But the prime minister no longer has the luxury of caring about the bond market or what institutional investors thought, because the income rural population have not “risen”, as the economic survey pointed, Sharma wrote.

He said that Jaitley’s scheme to improve the welfare of the farmers were unlikely to work, and the budget arithmetic on the world’s “largest” health insurance programme was “questionable on various grounds”.

Buried in the fine print of the budget – and barely mentioned by the finance minister in his speech – was an even more momentous change. For the first time in a generation, India is becoming less open. For decades, in budget after budget, Indian governments have lowered the country’s once-formidable tariff barriers. On Thursday, Jaitley sharply raised an entire swathe of customs duties on products as disparate as silk, iPhones, kites, televisions, shoes and Ikea furniture. The reason was straight out of the 1980s: Unabashed protection of local industry. The move was especially jarring after Modi, just a fortnight ago in Davos, had declared that protectionism was as great a threat as terrorism or climate change.

Arun Jaitley’s Budget Will Be Judged by Whether it Can Bridge the Gap

Populism won the tug of war with fiscal prudence in the Union Budget 2018, commented The Hindu in its editorial.

The opinion piece commented that Jaitley has “homed in unerringly on the root causes of distress” in the Indian economy, pointing that unremunerative farm incomes, unemployment, lack of social security nets as the causes for the same.

With this in mind, Jaitley has announced a laundry list of ameliorative measures. While his intent is clearly welfarist, resource constraints have forced him to rely significantly on extra-budgetary resources and external agencies to give life to many proposals. If they fail to materialise, it can lead to a gap between promise and delivery. Consider agriculture. After asserting that minimum support prices (MSPs) should cover all crops and assure farmers 1.5 times their production cost, food subsidy allocations for FY19 have been upped by a relatively modest Rs 29,041 crore. A ‘fool-proof’ mechanism has been mooted to avoid market prices falling below MSPs, but it is left to the Niti Aayog to work out the modalities.

The piece also commented while the budget was “liberal” in its rural allocation, it has been “frugal” where the middle class and the corporates are concerned.