The Alchemy of Vote on Account Budget 2019

When we look at the statistics dished out by an experienced charted accountant turned second generation treasurer of BJP who donned the robes of India’s finance minister, William Petty’s (1623-1687) political arithmetic would appear pale. William Petty’s important contribution to the stream of early social sciences is applying mathematics to the analysis of political and especially economic questions. As history informs, Petty worked on transmuting Irish into English by state manipulation of demography through proportionable mixture. The feat performed by Piyush Goel is nothing short of this.

Let us come to the point straight. Since fortnight, the commentariat is busy in guessing how popular would be the vote on account budget, the last budget presented by Modi government. Finally, a well-crafted statement read out by the vote on account finance minister unfurled the things. The mainstream media not wasted a single moment in the whole day to applause the vote minting budget and the new schemes dished out by the finance minister. It appears that the BJP’s spinning machine has not taken adequate care in ensuring the uniformity between the figures presented in the budget documents and the tone and tenor of the budget speech.

The budget speech proudly pated itself the last five years have seen India being universally recognised as a bright spot of the global economy. The country witnessed its best phase of macro-economic stability during this period. Starting from that high position, the finance minister passed over to dole outs to various sections via insolvency bankruptcy code. Apart from others, he proposed PM- KISAN, which replicates the TRS’s Rytu Bandhu scheme. Under this scheme government desired to transfer Rs 6000 into farmer’s bank account. The eligibility of the farmer to be benefited out of this scheme would be his vulnerability. The scheme itself is in contrast with the earlier government assertions. In the last budget, the standing finance minister Arun Jaitley informed the parliament that the BJP government redeemed its promise of doubling the farm income. When the government felt that the farmer’s income is already doubled, then what prompted this PM-KISAN scheme? This contradictoriness itself reveals that the government hushed-up the rural distress under jumlafied policies.

Let us consider the statement of receipts as stated in the budget documents. Over the last two years government and its media spinners tried their best to brainwash the nation that the introduction of GST helped to mop-up huge funds for the government which will be expended several welfare schemes. But the statistics in budget documents proved these assertions wrong. One indicator of economic growth is tax receipts from imports. Had the economy is booming as claimed by the spin masters of BJP, there would have been more imports and more income from import taxes. But the income earned through import taxes stood at 1.28 lakh crores in 2017-18 whereas it slipped to 1.26 lakh crore in 2018-19 FY. Same as the case with union excise taxes. The central government mopped up Rs. 2.58 lakh crores under this head for the financial year 2017-18 where as it could notch Rs. 1000 crores up during 2018-19 FY.

Another source of income for union government is taxes. Corporate tax, income tax and wealth tax are three key components under this category. As it is clear by now, the income tax ceiling is increased to Rs 5 lakhs from the existing level of Rs. 2.5 lakhs. That means a considerable number of the salaried class who are covered by income tax will be exempted from the income tax liability. Surprisingly, the expected receipts of income tax stood at the same level, the feat only possible for BJP government. Had the economy is on swing, the level of corporate tax should have gone up. But the share of corporate tax in the tax receipts are gradually declining over the last three years, a clear indication of strong alliance between BJP and Corporate world. The BJP government willfully lost an important opportunity to redefine the meaning of wealth tax in the light of ever increasing number of trillionaires. Despite the fact that there is no increase in receipts from key sources, the total income of government had gone up from Rs 2141975 crores in 2918-19 to Rs 2784200 crores for the financial year 2019-2020. Thus government wanted to mop up the additional amount through borrowings just to meet its electoral exigencies.

Of this additional borrowings, about Rs 60000 crores is expected to transfer directly to the vulnerable farmer’s bank accounts. Common man knows what would be fate of such amount transferred to account when the banks are not refilling the ATMs to enable withdrawal. In other manner, it would help to upkeep the reserves in the banking system at the best. The so-called increase in defence expenditure is merely Rs 15000 (from 2.85 cr to 3.05 crore) which is less than the amount subcontracted to Anil Ambani under Rafael deal.

Fertilizer subsidy is the key component that can help to sustain and rejuvenate cultivation. But government can only increase Rs 5000 for fertilizer subsidy. Had it been a fact that due to direct transfer to vulnerable farmers would expand the cultivation, mere Rs 5000 crore increase in fertilizer subsidy is not going to help the cultivation in anyway. Despite the grand claims by the government, the food subsidy increased only by Rs 13,000.

There is no notable increase in the allocations for rural development, health, education and even Swachh Bharat Mission. Despite smiling Modi’s face spanned out across the country on hoardings of Ujjwala scheme, the subsidy amount earmarked for distribution of LPG cylinders turned out to be lesser than the last year. This reveals the fact that instead of streamlining the economy, the BJP government only used this occasion to recast its vote minting strategy at the cost of public exchequer. Thus as William Petty’s alchemy of mathematics failed in transmuting Irish into English, the vote on account budget presented today is bound to fail in regenerating the Indian economy.