The issue for Common man is not whether the Budget is Good or bad, because , its quality can only be assessed by the qualified economists.
For a common man the Best way is to Look back at the last year’s Budget and a Year before that and ask Has his life improved ? The last years budget which was heralded by Govt as the - Path breaking Visionary budget , the Common man must and ask himself “ Could the last year Budget help mitigate some of our problems ?”
Yes many Kms of Highways have been constructed, many bridges have been constructed but For a common man, his life has not improved a bit and may be for some it has become more agonizing. None can deny the importance of Roads and Highways, but what if these Roads and Highways only lead to opening of Dhabas and sharing of bribes amongst various stake holders.
Path Breaking Budget of 2021
The common man still has to take his sick family members to a Private clinic and pay from his savings. Because Govt did nothing to improve its Hospitals.
His kids are at home these days and he is paying school fees as they go to private schools, the Govt did nothing to improve the standard of its schools.
The common man is also bearing the additional burden of internet due to Of line classes.
Many young ones who lost their jobs have not got any as yet and many of them are living a difficult life in small dingy rooms shared by sometimes 5-10 people.
Many sectors of our economy have been hit for instance Hospitality sector, manufacturing, tours and travels and so millions lost their jobs. MSMEs, startups and entertainment provide employment to millions of people in the country and make up a substantial amount of the nation’s entire GDP.
And Many have not been receiving Full salary, for last two years now.
Most of these jobs do not provide any social security also ; No medical reimbursement, no pension, even no gratuity, No PF.
Many young students who have just finished their Engineering/ MBAs /Graduations are staying at home searching jobs. As per the economists India inorder to meet the employment needs of its growing young population, its economy should be capable of generating 20 million jobs every year where as India has been adding only around 4 million jobs a year for last one decade.
According to the estimates of Pew Research “ More than 25 million people have lost their jobs since the start of 2021. And more than 75 million Indians have plunged back into poverty, including a third of India's 100 million-strong middle class, setting back half a decade of gains .”
The recent agitation by students in UP and Bihar where in for barely 30000 vacancies more than a crore applications were received indicates the gravity of the crisis
The Fuel prices have gone up enormously and so have the prices for vegetables, LPG, grocery.
So, the path breaking Budget of 2021 did not ease the life of a common man . The Union finance minister had although called the Union Budget for 2021-22 as ‘once in a century’ budget.
It is quite possible that some may have different yard sticks for evaluation.
So, in short the current budget has come amid LOW DEMAND, JOB LOSSES, HIGH INFLATION and offcourse on going corona crisis.
For a layman if the prices are high inflation will mount, there will be less demand, there will be less jobs.
How will the Govt handle this challenge?
One. FM ANNOUNCED a mammoth spending plan on Roads and highways, cargo terminals , trains etc.
All these provide low quality jobs and their gestation period is too much. The land acquisition takes time. And lastly where will the money come from, the Fiscal deficit is already touching 5% , borrowings will come with additional challenges.
Two. Incentives to start ups and more emphasis on Manufacturing to create jobs.
India is not an island it is dependent on the world also , if the world economy continues to remain sluggish , we will not grow at a pace that is needed to create so many jobs. A recent Bloomberg report suggested that 20 crore jobs are missing from the economy and restoring balance would be difficult without adequate fiscal policy support from the government.
As per the report Almost 85% Indian start ups have failed , this may cause problems for bankers.
Manufacturing has remained stagnant at 15 % of GDP for last 10 years and worse With higher inflation in 2022, price of essential commodities may rise substantially and it could worsen the situation for middle income and poor.
The question therefore should be - Can these challenges be handled by a budget ?
If we have a problem that our hospitals do not work, our courts do not provide timely justice, our gestation period of projects is high, the land acquisition takes a lot of time, the cost of electricity is too high, the freight rate is too high, the availability of skilled labour is difficult then these cannot be solved by the Budget. This implies that the country has deep structural problems.
The CIIs Business excellence model clearly explains that if structural issues . i.e THE PROCESSES are not addressed any amount of money or any other resource put into the system will go waste and will not serve the purpose. Although it is a Business Model but it is applicable to all Organisations including the NGOs and Govt, with appropriate modifications. The crux is ; THE PROCESSES , And these structural issues cannot be solved by the Budget.
But instead of just addressing the structural problems what the Govt has done is ; it has used its revenue to score some political brownie points for its electoral gains.
One of my friends with IT Company sarcastically commented ; chotta sa khet kharid letey hain ab aur kisan ban jaatey hain…har saal compensation account mey aa jayega, bank sey loan bhi maaf ho jaayega aur subsidy ka paisa bhi milega.
Jokes apart, the main issue is Even the Farmer is also having a tough time, the man on the street is also facing difficult times. Its not difficult to find households with four members managing with just 250 ml of millk daily.
So, what We really need today in order to ease the life of a common man is take a Holistic view of the entire economy and bring out structural reforms.
In the absence of any structural reforms; Let me put it Bluntly , despite what PM and Sitharaman has talked about the Budget, come Feb23, we will still be finding ourselves at the same stage where we are now ; Youngsters short of jobs, Kids going to Private schools, Offline education taking its toll, Price rise, Sick to be taken to Private hospitals and so on .....