Budget 2018: Modi government must deliver on its promises
In another 24 hours, the next and the last full Budget of the present government would have been rolled before the country. With an agrarian crisis staring the government in its face, a consensus finally seems to have been built around laying greater emphasis on agriculture, education, and creation of jobs.
Meanwhile, the Economic Survey has also been tabled. The finance ministry has forecast India's GDP will grow at 7-7.5 per cent in 2018-19 renewing hopes of repositioning India as one of the fastest growing economies of the world after the twin jolt of Goods and Services Tax and demonetisation.
Although the statistics shared project a respectable overall GDP, increase in exports, foreign exchange reserves and also the number of taxpayers, the forecast is not very clear about the health of the unorganised sector, which employs the largest number of people.
On papers, the 3.2 per cent fiscal deficit target for the current financial year may seem manageable but following the fiscal roadmap strictly to achieve this may turn out to be a big challenge for Prime Minister Narendra Modi or any other government given that the general elections are just round the corner.
During the presentation of Budget 2016-17, the BJP had promised to double farmers' income by 2022. The Ashok Dalwai committee set up by the government to examine ways of achieving this target had estimated that the government would need to spend an additional Rs 6,40,000 crore to fulfil the same. This remains a tall order.
The party rode to power on the back of promises made over creation of new jobs. A recent report by the International Labour Organisation has pointed to unemployment in India rising to 18.6 million this year. Both the organised and unorganised sectors have not been able to grow at a pace good enough to create enough jobs to meet the government's promises. However, the recent decision of the government to scrap all 5,000 posts, which have remained vacant for five years, in the central/state government sectors is a step worth appreciation.
While it is clear that there is little scope to create jobs in the public sector overnight, it must be borne in mind that if jobs are not created in the informal labour-intensive sector, the problem of unemployment would grow out of control.
Food inflation, which affects every household, has risen considerably since 2014. One hopes the government's survey has factored in the spike in global crude oil prices and the immense impact it might leave on items of day-to-day consumption in targeting a 7.5 per cent growth in GDP.
The road ahead is difficult. With revenues having significantly fallen post GST, it is important for the government to increase spending to spur growth. However, an increased spending would not augur well for the fiscal deficit target set by the government.
Finance minister Arun Jaitley surely needs a magic wand to strike the right balance to keep the economy on the growth trajectory.
Unemployment, sluggish growth and agrarian crisis are just the kind of issues the Opposition is eyeing to attack the government in the run-up to the general elections. The government has already been caught on the wrong foot following its promise of returning Rs 15 lakh to each Indian citizen's account by tapping in the black money allegedly stashed aboard. The whole thing turned out to be so embarrassing for the BJP that party president Amit Shah himself had to dismiss the promise as an election "jumla".
It is thus time for the government to deliver on the rest of its promises.