The benefits to the MSMEs would be much lower than what the Budget speech shows. In fact, that’s the general trend in the Budget; the FM has talked about many good things- from rejuvenating rural India to universal health coverage to doubling farmers’ income. But when it came to fund allocations, he seems to have left a large gap between aspirations and reality.
A budget is as good as its premises are. Thus, it will be more meaningful to look at the Union Budget 2018-19 in relation to its premises than to see it in isolation with what the Finance Minister, Arun Jaitley, has and hasn’t done. What were the premises of the Budget? Or, to be more specific, what were the basic, stated intentions of the government, which it sought to address in the Budget?
The Finance Minister was euphoric that the GDP growth, at 6.3% in the second quarter, has signaled the turnaround of the economy. The economy would grow at 7.2% to 7.5% in the second half. The IMF, in its latest update, has forecast that India will grow at 7.4% next year. The economy is now firmly on course to achieve high growth of 8% plus, the FM announced in his Budget speech.
The question is: Whose GDP it is? Would lives of the rural masses improve or would the benefits of higher growth go to pockets of a few? The Economic Survey, published before the Budget, has in fact, sought to give certain guidelines.
The executive agenda of the government for the next year would revolve around stabilising the GST, completing the Twin Balance Sheet actions, privatising Air India, and staving off threats to macro-economic stability, the Survey has said.
As for policy focus, the Survey has identified three areas for medium term actions: (a) Employment: Finding good jobs for the young and burgeoning workforce, especially for women. (b) Education: creating an educated and healthy labour force. (c) Agriculture: raising farm productivity while strengthening agricultural resilience. Above all, India must continue improving the climate for rapid economic growth on the strength of the only two truly sustainable engines—private investment and exports.