The interim Budget 2019 presented by Finance Minister Piyush Goyal on Friday, 1 February, is for the farmers and the middle class, Principal Economic Adviser Sanjeev Sanyal told BloombergQuint.
He said farming output has dramatically increased for the last couple of years and that has caused a downward pressure on prices.
“As a result of that – it (farmers’ output) has been good for the economy and the rest of us have benefitted from that. We have food prices at record low inflation. In fact, in many cases, you can see deflation. So we go back a few years ago – pulse and food prices were going up and down, but we have have very stable food prices now,” the principal economic advisor said.
This is an attempt to give some returns to farmers, Sanyal added.
‘Budget 2019 Also For Middle Class’
The Budget is also for the middle class who took disruptions of some economic policies in their stride, Sanyal said.
“The middle class – this is the class that has been really good troopers, as the FM has pointed – took several important disruptions in their stride. This class was impacted by demonetisation, even Goods and Services Tax (GST). Maybe there are long term benefits, but it was destructive,” he said.
“(In the Budget) Finance Minister Piyush Goyal was thanking them (middle class) in being supportive in these reforms and acknowledged that something had to be given back.”Sanjeev Sanyal, Principal Economic Adviser
The economic adviser also lauded the government’s attempt to strengthen the country’s infrastructure.
“This govt has shown more commitment than it should have to infrastructure in the last five years. I don't think there has been any let up in building metros in city or highway building or dramatic expansion,” Sanyal said.
How Has PM Modi Fared?
Highlighting Prime Minister Narendra Modi’s performance in improving India’s economy, Sanyal said, “Essentially PM Modi was trying to create a rule-based economic system and replace the old take from niche-based, rent-seeking kind of economy. Everything that has been done has been done with this view of replacing these systems, breaking the old patronage systems by cracking down on black money, real estate, misuses, banking sector and the ever-greening that used to happen.”
“Breaking it down is one part of one thing he did and now (he is) replacing it with a framework of rules,” he added.
“We had an extremely complicated tax system. Different states were doing different things, no one knew what was going on. You now have a GST council, now shifted onto a new regime under the GST.”Sanjeev Sanyal, Principal Economic Adviser
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