Mainstream Weekly

Home > 2020 > The Union Budget 2020-21 May Not bring Indian Economy back on (...)

Mainstream, VOL LVIII No 10 New Delhi, February 22, 2020

The Union Budget 2020-21 May Not bring Indian Economy back on Track

Friday 28 February 2020

by D.M. Diwakar

The Economic Survey of the current financial year 2019-20, presented in Parliament, gives the present status of the Indian economy. This provides the basis for the policy responses through the Union Budget for the next financial year 2020-21. The Union Budget has become now merely ceremonial, as many financial decisions have been taken outside Parliament. The latest press conference by the Finance Minister for the benefits of the corporates to the tune of Rs 1.46 lakh crores before this Budget is one of the instances. However, the Union Budget is a proposal for resource mobilisation, development initiatives and priorities for course correction to take the economy forward. The Budget is broadly a statement of account of income and heads of expenditure through which course correction is possible. Therefore it is expected that the Union Budget will respond to the concerns of the Indian economy. This exercise is intended to underline broad concerns of the Indian economy reflected in the Economic Survey 2019-20 and deal with corresponding responses through the Union Budget for 2020-21 followed by analytical imperatives that will emerge in due course of analysis.

The Economic Survey in reference suggests that the growth rate of the first revised estimate of Gross Value Added (GVA) at basic price for 2017-18 was 6.9 per cent, which was provisionally estimated at 6.6 per cent in 2018-19 and 4.9 per cent in 2019-20 as the first advance estimates. Sectoral figures for growth rates in the corresponding period of reference for agriculture and allied sectors were 5.0, 2.9 and 2.8 per cent respectively. In case of industry these figures were 5.9, 6.9, and 2.5 per cent, the corresponding figures for manufacturing were 5.9, 6.9 and 2.0 per cent, electricity, water supply, gas and other utility services 8.6, 7.0, and 5.4 per cent, for construction 5.6, 8.7 and 3.2 per cent respectively. So far the services sectors are concerned, these figures were 8.1, 7.5, and 6.9 per cent respectively. Subsectors’ performance suggested similar trends except public administration, defense and other services. Trade, hotel, transport and communication and services related to broadcasting registered 7.8, 6.9, and 5.9 per cent, finance, real estate and professional services accounted for 6.2, 7.4, 6.4 per cent respectively. Growth rates for Gross Domestic Product (GDP) at market prices for the period in reference were 7.2, 6.8, 5.0 per cent respectively. Thus, the above estimates suggest that percentage point change in growth in 2019-20 over 2018-19 for GVA was -1.7, agriculture and allied sectors -0.1, industry -4.4, manufacturing -5.0, electricity, water supply, gas and other related services -1.6, and construction 5.6 per cent respectively. So far as the services sectors are concerned, overall change was -0.7 per cent but the growth rate for trade, hotel, transport and communication and services related to broadcasting was -1.0 and finance, real estate and professional services was -1.1 per cent and that of GDP was also -1.8 per cent. Quarterly trends were recorded even worse where the growth rate of GVA for the second quarter of 2019-20 was merely 4.3 per cent. Thus, official data released by the Government of India through the Economic Survey 2019-20 suggests overall deceleration in the Indian economy. (GoI, 2020; Vol-2:17)

The latest data related to the consumer price index (CPI) were moving up over six per cent and the wholesale price was going down to 1.3 per cent. Growth of bank credit of the private sector is higher than the public sector banks. Needless to say that the private sector banks deal mainly with viable customers who can pay and who have assured income. Thus, it hardly caters to the informal sector especially in the rural areas barring a few exceptions. The growth of public sector bank credit is dismal. Except personal loan others were downward, such as, credit to non-food, MSME, large industry, and services were declining. Growth rate of merchandise and services were negative. Net inflow of foreign direct investment (FDI) was US $ 3.7 billion in 2015-16, which declined to US $ 3.6 billion in 2016-17, further declined to US $ 3.0 billion in 2017-18 and with a little improvement to 3.1 in 2018-19 and 2.6 billion during April-November 2019-20.

The fact remains that with declining growth in primary sector and relative emphasis on secondary and tertiary sectors share of agriculture and allied activities in GVA has been declining and remained 13.9 per cent with the largest share of population. Industry and services contributed 28.3 and 57.8 per cent respectively in first half of 2019-20 with the least burden of population. Hence, continued structural imbalances have not been addressed properly and deceleration has every potential to aggravate structural imbalances further. In such a scenario the most discouraging fact is declining investment to the tune of 28.3 per cent of GDP, which has circular implications of lower investment, lower growth, lower employment, and lower demand syndrome. Moreover, Gross Fiscal Deficits were pegged up to 3.8 per cent. Therefore, in this backdrop the Union Budget was expected to come out with a set of formidable proposals for course corrections and the Finance Minister was expected to deal with decelerated growth rate, declining investment, consumption, rising CPI, alarming unemploy-ment, more intelligently to overcome the disappointing situation of India’s economy in the proposed budget. Let us examine as to how intelligently the crises of Indian economy have been addressed in this Budget.

The proposed Union Budget 2020-21 was placed before Parliament on February 1, 2020. This Budget is to the tune of Rs 30,42,230 crores. Total receipts are Rs 3037067 crores. Total Revenue receipt is Rs 2020926 crores and total Capital receipts are to the tune of Rs. 10,74,306 crores. Out of total receipt 17 per cent is proposed to mobilise from Income Tax, 7 per cent from Union Excise Duties, 18 per cent from Corporate Taxes, 18 per cent from Goods and Services Tax (GST), 4 per cent from Custom, 10 per cent from Non Tax Revenue, 20 per cent from Borrowing and other Liabilities and 6 per cent from Non-Debt Capital Receipts. Total expenditure has been proposed to the tune of Rs 30,42,230 crores. Out of tota expenditure 6 per cent goes to Pension, 9 per cent on Centrally sponsored Schemes, 6 per cent on Subsidies, 8 per cent on Defence, 18 per cent on payment of interest, 20 per cent on State share of taxes and duties, 10 per cent on Finance Commission and other Transfers, 13 per cent on Central Sectors Schemes, and 10 per cent on Other Expenditures. Hence, the deficit is of Rs 5163 crores.

If one dwells on it further, out of total expenditure, 20.03 per cent is proposed to spend on establishment expenditure, which is less than the revised estimates of 21.02 per cent and lower than actual expenditure of 2018-19, that is, 22.52 per cent. This implies that no expansion in institutional capacity of the government will be possible. Even the given strength of establishment will be stressed further. This further implies weakening of public sector and drive to outsource and privatisation of public sector activities. Central sector schemes and projects have provision of expenditure to the tune of 27.34 per cent, which is less than actual expenditure in 2018-19 (27.58 per cent). Proposed expenditure on this head in 2019-20 BE was 31.25 per cent in 2019-20 BE and revised to 28.65 per cent of total expenditure. About 29.18 per cent is proposed to spend on other Central sector expenditure, which was 29.26 per cent in 2018-19. This has been reduced in 2019-20 BE to 27.71 and 27.48 per cent, in 2019-20 RE. Major part of other Central sector expenditure is on payment of interest to the tune of 23.28 per cent, which was 23.16 per cent in 2019-20 RE. However, it was 23.70 per cent, in 2019-20 BE and still 25.17 in 2018-19. Thus, expenditure on payment of interest has been reduced, which is a good sign if debt servicing is reduced. It is bad if the government is not able to pay and therefore it is reduced.

It is proposed to spend 11.17 per cent on Centrally Sponsored Schemes. Expenditure on this account was 12.17 per cent in 2018-19, which was pegged up to 13.9 per cent in 2019-20 BE, but it was reduced to 11.74 per cent in 2019-20 RE. This implies that whatever schemes were announced and approved in Parliament under this head, was reduced, as the government was not in a position to keep its promise, which is an alarming situation for a democratic state. Proposed Finance Commission grants is 4.93 per cent in 2020-21, which is higher than the grants in 2018-19 (i.e., 4.05), but significantly lower than the provision in 2019-20 BE (5.21 per cent) but higher than that of 2019-20 RE (4.58 per cent). Other grants, loans and transfers are proposed to tune of 7.34 per cent, which was budgeted to the tune of 5.21 per cent in 2019-20 and further increased to 6.53 in 2019-20 RE. This is a significant increase over 2018-19 (3.81 per cent).

Let us examine the proposal for sectoral allocation of resources in this Budget 2020-21. The budgetary allocation in the fiscal plan for agriculture and allied activities has increased significantly from Rs 63,259 crores in 2018-19 to Rs 1,20,835 crores in 2019-20 (RE) to Rs 1, 54,775 crores in 2020-21 (BE). This increase of 28.08 per cent over the previous year raises hopes for redressal of the agrarian crises apparently. However, if we go further into details, the situation is not so encouraging. Emphasis on horticulture and fisheries appears merely lip-services. Allocation to horticulture has increased from Rs 2,225 crores in 2019-20 to Rs 2,300 crores in 2020-21 (BE), that is, only Rs 75 crores or 3.37 per cent, which is less then the rise in consumer price index (CPI) and from Rs 560 crores to Rs 570 crores for blue revolution from 2019-20 to 2020-21 (BE) respectively. Reduction in allocation for procurement fund for the Food Corporation of India (FCI) by Rs 76,000 crores from Rs. 1.51 lakh crores from the last Budget will have huge adverse implications on agriculture foodgrains prices. Paying 150 per cent of the cost of agricultural production as support price to farmers was acclaimed with big hype but the reality remained far from the truth not only in terms of fixation of the Minimum Support Price (MSP) by the Commission for Agriculture Costs and Prices (CACP) but also in terms of insignificant coverage of the MSP and funds allocation for the purpose. The MSP coverage has been around six per cent and there was no allocation for improvement for the procurement infrastructure and mechanism. Moreover, funds allocated to MSP kitty was Rs 3,000 crores in 2019-20 (BE), which was reduced to Rs 2,010 crores in 2019-20 (RE) and now has further been curtailed to Rs 2,000 crores in 2020-21 (BE). Allocations for PM Kisan Samman Nidhi (PM Kisan) remained constant in 2020-21, as it was budgeted in 2019-20, that is, Rs 75,000 crores. But it was reduced Rs 54,370 crores in 2019-20 RE. This shows the competence of the government to spend money on account of farmers’ welfare. PM Anndata Aay Sanrakshan Yojana (PMAASHA) to assist purchase of agriculture produce from the farmers has been reduced from Rs 4,721.12 crores in 2018-19 to Rs 1,500 crores in 2019-20 and revised to merely 321 crore. Now proposal for further reduction to merely Rs 500 crores. Under the Pradhan Mantri Man DhanYojana (PMMDY), the Budget distribution has reduced from Rs 900 crores in 2019-2020 to Rs 220 crores in 2020-21 (BE); this scheme provides a social security net for Small and Marginal farmers. Similarly budgetary allocation of PM Kisan Man Dhan Yojana (PMKMDY) has been reduced from Rs 900 crores to Rs 220 crores only. This curtailment in the allocation will adversely affect the farmers massively as they are the largest in number in the agricultural sector. There is no provision of funds for Krishi Udan Yojana which will giveassistance for trans-portation of agricultural products through special airlines on-time. Increasing targets of bank loan amount and reforms in State agriculture and land laws are mere advisory and have nothing to do with the Budget. Allocation for white revolution has been reduced from Rs 2240 crores to 1185 crores.

Proposal for budgetary allocation to water resources, river development and Ganga rejuvenation has been increased nominally from Rs 8245.25crore for 2019-20 BE to Rs 8960.39 crores in 2020-21 crore. This increase is reflected in major and minor irrigation also. However, budgetary provison for the last Budget was reduced to Rs 7518.15 crore in 2019-20 RE. Moreover, provision for Har KhetkoPani under PM KrishiSinchaiYojana (PMKSY) was reduced from Rs.1069.55 crore to Rs 1050.55 crore. For flood control and drainage budgetary provision was reduced from Rs 208.75 in 2018-19 to Rs 156.19 in 2019-20 BE and it has further been reduced to merely Rs 39.78 crores.

Proposed allocation for economic services in development heads in fertiliser has been reduced from Rs 80,035 crores to Rs 71,345 crores. and fertiliser subsidy has been reduced from Rs 79,996 crores to Rs 71,309 crores from 2019-2020 to 2020-21 (BE) respectively. Investment in fertiliser public enterprises was Rs 2907.52 in 2019-20 RE, which has been reduced to Rs 543 crores only. Hence, public sector is bound to perish under financial constraints.

Allocation on total food subsidy has also seen a sharp decline from Rs. 1,84,220 crores in 2019-2020 to Rs 1,15,569 cores 2020-21(BE). Further, under the National Food Security Act, under the head of strengthening of Public Distribution System (PDS) operations has dropped from Rs 30 crores in 2019-2020 (BE) to Rs 8.70 crores 2020-21 (BE); integrated management of PDS receipt from Rs 50 crores 2019-20 got halved by Rs 25 crores in 2020-21 (BE). And also, storage and godowns allocation has been reduced from Rs 70 crores to Rs 50 crores in 2019-2020 to 2020-21 (BE) respectively. These abridgements in resource allocation and the timing of these decisions has been eccentric because as per macro data representation, beneficiaries of the PDS had actually started reaping the benefits; this will additionally shadow the dream of attaining food security completely. This will further affect India’s position in the Global Hunger Index where we had already been relegated from the 102nd position out of 107 countries in 2018 to the 102nd position out of 117 countries in 2019.

In the context of Budget allocation in the Ministry of Human Resource Development, there is an increase from Rs 94,853.64 crores in 2019-2020 to Rs 99,311.52 crores in 2020-21 (BE), that is, 4.7 per cent. Further disaggregation shows that there is a meagre increase of three per cent in the allocation of Higher Education, from Rs 38,317.01 crores in 2019-2020 to Rs 39,466.52 in 2020-21 (BE) and 5.85 per cent in the allocation of School Education and Literacy from Rs. 56,536.63 crores in 2019-2020 to Rs 59,845 crores in 2020-21 (BE). Right to Education was mandated to provide education free and compulsory to all but the way budgetary allocations have been rationalised, it is now far from the dream to be realised. The result of continuous reduction in allocation will foil the State from achieving its vision/goals for digital e-learning. As we see, the Budget allocation in National Mission in Education through Information and Communication Technology (ICT) has been sharply reduced from Rs 170 crores in 2019-2020 to Rs 85 crores in 2020-21 (BE). Furthermore, outlays in virtual classrooms and massive open online courses (MOOCs) has also been reduced from Rs 130 crores in 2019-2020 to Rs 75 crores in 2020-21 (BE). The Budget reduces the allocation for research and innovation in Higher education from Rs 608.87 crores in 2019-2020 to Rs 307.40 crores in 2020-21 (BE). Under the Central sector schemes, allocation for Pandit Madan Mohan Malaviya National Mission on Teachers and Teaching, which aimed at improving the quality of education at all levels by instilling excellence and quality in our teachers and teaching, has been reduced from Rs 130 crores in 2019-2020 to Rs 50 crores in 2020-21 (BE). In higher education, a scheme like GIAN (Global Initiative for Academic Work) was launched to reap the benefits from scientists and entrepreneurs internationally by engaging and leading to elevate India’s scientific and technological capacity to global excellence. Allocation, for GIAN has been reduced by 50 per cent from Rs. 30 crores in 2019-2020 to Rs 15 crores in 2020-21 (BE), which will act as a deterrent to achieve its goals. Policies like Impact Policy Research in Social Science (IMPRESS) are getting no funds at all in the Budget 2020-21 (BE). Fiscal outlay for Rashtriya Uchhatar Shiksha Abhiyan (RUSA) has been reduced from Rs 2,100 crores in 2019-20 to Rs 300 crores in 2020-21 (BE). Therefore, this budgetary allocation on education in no way appears inclusive and is bound to widen up the digital divide.

Allocation in Skill and entrepreneurship has shown a nominal increase from Rs 2,989.21 crores in 2019-20 to Rs 3,002.21 crores in 2020-21 (BE). Schemes under Pradhan Mantri Kausahal Vikas Yojana like Development of Skills and Strengthening of Infrastructure for institutional training, has reduced outlay from Rs 2,400 crores in 2019-20 to Rs 1,590 crores in 2020-21 (BE) and from Rs 125.15 crores in 2019-20 to Rs 86 crores in 2020-21 (BE) respectively. Already languishing in achieving the targets of skill development, this Budget will further aggravate move towards disappointments.

The budgetary allocation in the health sector has been increased nominally by 3.8 per cent from Rs 64,999 crores in 2019-20 (BE) to Rs. 67,484 crores in 2020-21 (BE). This amount in real terms is not even at par with last budgetary provision if one takes inflation into accounts. In this budget, allocation of family welfare schemes has been reduced from Rs 700 crores in 2019-20 to Rs 600 crores in 2020-21(BE). There is allocation of funds for Impacting Research Innovation and Technology (IMPRINT) scheme in this Budget, as last year Rs 3 crores in 2019-20 was allotted. The annual Budget for Public Serving Medical Institutions like National Academy of Medical Sciences, All Indian Institute of Medical Sciences, Post Graduate Institute of Medical Education and Research, Puducherry and Jawahar Institute of Post Graduate Medical Education and Research, Pudducherry has been reduced from Rs 1.80 crores in 2019-2020 to Rs 1.60 crores in 2020-21 (BE), Rs 3,599.65 in 2019-20 to Rs.3,489.96 2020-21 (BE), Rs. 1,500 crores in 2019-20 to Rs 1,426.53 crores in 2020-21 (BE), Rs 1,100 crores in 2019-20to Rs 1,000 crores in 2020-21(BE) respectively. Continuous decline of budgetary allocation in these public serving hospitals and research institutions has created adverse pressure on the health care system, which is already facing financial crises and trying to serve the common people with least available resources. The continuous yearly deduction and initiatives of setting up hospitals in the Public Private Partnership (PPP) mode to fix the inadequate performance of the Ayushman Bharat Scheme is indicating gradual withdrawal of the state from its minimum health care responsi-bilities on the one hand and feeding private sector through bleeding public exchequer under the shadow of the PPP model. Under the head of Centrally Sponsored scheme there is no increment in total allocation on National rural Health Mission (NRHM). It proposes the same amount (Rs 27,039 crores) for both year 2019-20 and 2020-21 (BE). Thus, in real terms the allocation has been reduced from the last Budget if inflation is taken into account.This shows that the govern-ment has lost its priority to ensure health and wellbeing of the people and is forcing the people to move towards private corporate health markets.

Budget allotment under the Rural Development has been reduced by 2.04 per cent from Rs 1,22,649 crores in 2019-20 (RE) to Rs 1,20,147.10 crores in 2020-21 (BE). This is not surprising for us as it has always been giving just a lip-service by claiming rural-centric and farmer-focused and had not been so since NDA II regime (Diwakar, 2018). Under the Centrally Sponsored scheme—National Social assistance programme, there is reduction in allocation from Rs 9,200 crores in 2019-20 to Rs 9196.92 crores in 2020-21 (BE). Expenditure in Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has been reduced significantly by 13.4 per cent from Rs 71,002 crores in 2019-20 (RE) to Rs 61,500 crores in 2020-21 (BE). It implies that the government has lost the concerns to address the issue of ‘rural distress, where majority of the total population resides in rural India. Not making provision of funds as Grants to the National Institute of Rural Development in this Budget is a clear indication that public efforts through research and training are not important to this government.

There has been nominal increase in the Budget allocation from Rs 11,184.09 crores in 2019-20 to Rs 12,065.49 crores in 2020-21 (BE). Labour welfare schemes show a 2.04 per cent rise in the Budget allocation from Rs 147 crores in 2019-20 (RE) to Rs. 150 crores in 2020-21 (BE), but allocation in employment generation programmes shows a drastic decline of 24.42 per cent from Rs 3,501.79 crores in 2019-20 (RE) to Rs 2,646.39 crores in 2020-21 (BE). Under this Budget many schemes haven’t been allotted funds, such as, Industrial relations, working condition and safety and Machinery for better conciliation, Preventive mediation, effective enforcement of labour laws, Chief Commissioner Officer. Thus, this government has ignored the core issues of employment generation. Needless to bring to the kind notice of the readers that the country is facing 45 years record-high unemployment and it is the general expectation that some redressal initiatives should have been put in place. On the contrary, even the funds for flagship programmes were also reduced. Fund allocation under the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) has been reduced from Rs 4,500 crores in 2019-2020 to Rs 2,550 crores in 2020-21 (BE). The PMRPY is meant to encourage employment via incentivising the labours and also to access social security benefits. And if employment generation is not on the agenda of this government, transfer of income to people is a distant dream; the implies no let up in the declining Indian economy from bad to worse.

In this Budget, there is an over-emphasis for the usages of robotics and Artificial Intelligence (AI), which will not only aggravate joblessness but also create more inequality and widen the gap because the accessibility to technical know-how in a syndrome where basic education with equity and equality is still a serious challenge. Setting up a national recruitment agency (NRA) and computer driven online-based common eligibility test for recruitment of non-gazette posts is a move towards centralisation of the recruitment process which is already in a dormant stage. Challenges of coordination between the departments may delay the process of recruitment further so long it will be put in place and attain institutional efficiency to outcome performance. It may go for outsourcing human resource private agencies, which will make the situation more vulnerable. Moreover, departmental recruitment has specialised skills to take people on job required to its outcome. The NRA may not be focused on such institutional variations. Data Analytics and Internet of Things (IoTs) are changing the lives of the people. Building data centre parks by the private sector will bring problems of right to privacy, market control, manipulation of consumer choices and consequently vulnerability in the market-ruled economy.

After assessing total allocation of Women, Child and Social Welfare, increase in total allocation can be traced from Rs. 2,3025.59 crores in 2018-19 to Rs 2,6184.50 crores in 2019-20 (RE) and this year to Rs 3,0007.10 2020-21 (BE). This shows an increased funding. Centrally sponsored scheme received a little hike of Rs 29,270.38 crores in 2020-21 (BE) from Rs 28,914.37 crores in 2019-20. This indicates prima facie that the Union’s pledge for women empowerment and their protection is translated in their Budget too, which is welcome step. But when one tries to find symmetry between proposals and their respective allocation, this puts forth a few question-marks. Firstly, the widely claimed “beti bachao, beti padhao” allocation has been reduced significantly from Rs 280 crores in 2019-20 to Rs 220 crores in 2020-21 (BE). Secondly, total allocation of Mission for Protection and Empowerment of Women decreased from Rs 1,330 crores in 2019-20 to Rs 1,163 crores in 2020-21 (BE) and thirdly, the Scheme is funded from the Nirbhaya fund which similarly faced slashing funds from Rs 201.21 crores in 2019-20 to Rs 80 crores in 2020-21 (BE). Collectively the umbrella Integrated Child Development Scheme (ICDS) received a meagre increase of Rs 28,557.38 crores 2020-21 (BE) from last Budget’s Rs 27,584.37 crores 2019-20. Similarly, total increase in Centrally sponsored schemes for women, child and social welfare has been nominal that is; from Rs 29,164.90 crores in 2019-20 to Rs 30,007.09 crores 2020-21 (BE). Ministry of Social Justice and Empowerment allocated an amount for central scholarships from Rs 535.50 crores in 2019-20, which increased to Rs 545 crores in 2020-21 (BE). Though National fellowships for Schedule Castes (SCs) was allotted Rs 360 crores in 2019-20 which is now reduced this year to Rs 300 crores in 2020-21 (BE). Our government’s determination to abolish manual cleaning of sewer systems or septic tanks with suitable technologies for through legislative and institutional changes is widely accepted and applauded. Contradictorily, allocation under the self-employment scheme for rehabilitation of manual scavengers for both the year 2019-20 and 2020-21 (BE) has been Rs 110 crores; this raises doubts on their willingness to remove this system. Thus, these provisions have shaken the confidence of people in the commitment of government towards beti bachao beti padhao, protection and empowerment of women, nirbhaya, welfare of Scheduled Castes.

The fact remains that the Budgets presented by the Bhartiya Janata Party (BJP)-led National Democratic Alliance (NDA) — II, were neither farmer-focused nor-rural centric as claimed. (Diwakar, 2018) Although, this Budget projects itself as populist, fiction-tuning and full of rhetoric, and creates illusion instead of explaining dire straits of economic condition as it lacks visions and initiatives of corresponding proper redressals towards fundamental of economic slowdown and financial distress. This also indicates lack of willingness of this government to deal with Indian economic crises. Since this article deals from the common man’s perspective through a few major and important segments only, it has not addressed other important proposals, which also obviously affect the common man adversely.

For instance, the overarching role of the PPP in construction of warehousing, national cold supply chains, etc. establishment of medical colleges, smart cities and passengers’ train will not absolve the government from its responsibilities and accountability and penetrating privatisation in these sectors, which will affect lives of common people adversely. Overwhelming data concentration and also power concentration in the hands of private players will broaden the scope and role of the private sector through the PPP mode, which will be dangerous for the democratic structure and nature of our state and its people.

The major question of the present slowing down of the Indian economy because of the collapse of informal sector due to abrupt demonetisation and unsuccessful GST, remained unaddressed in this Budget. Needless to mention that collapse of the largely spread multi-dimensional informal economy has huge implications on loss of employment, income and purchasing power, which in turn resulted in sharp decline of rural consumption demand to the lowest level in the last four decades. This has not only aggravated unemployment and but also pushed even the formal economy into deep distress so that the growth rate of eight core industries declined. The problems of unemployment, credit flow, improving propensity to consume have not been addressed. One finds difficult to search a rationality behind this indifference as to why this government is not willing to maintain the transparency and share its model of growth and solution for tackling the problem of economy, so that market, stakeholders, investors, banking system, negative growth of exports and consumers will come out from skepticism, uncertainty and fear of more bad indications ahead than earlier. In this syndrome, this Budget does not appear to give a clue as to how the economic slow-down will be restored so as to bring back on track. 

References

Diwakar, D. M., (2018): “Are NDA-II Government’s Budgets Farmer-Focused and Rural-Centric?” Mainstream, Vol. LVI, No. 10, February 24.

Government of India (2020): The Economic Survey of India 2019-20, Ministry of Finance, Department of Economic Affairs, Economic Division, North Block, New Delhi, www.finmin.nic.in accessed on 31.01.2020.

Government of India (2020): Union Budget 2020-21, Ministry of Finance, Department of Economic Affairs, Economic Division, North Block, New Delhi, www.finmin.nic.in accessed on 01.02.2020.

notes

Assistance in providing partial inputs for this exercise by Ms Smriti Saurabh Shingh and Ms Varsha Maheshwari is acknowledged with appreciation.

D.M. Diwakar, Ph.D is a Professor and Head, Division of Econimics and Agricultural Economics, and former Director, A.N. Sinha Institute of Social Studies, Patna. He is also the General Secretary and Indian Social Science Academy. He can be conducted by a e-mail id: gsissa1974[at]gmail.com

Notice: The print edition of Mainstream Weekly is now discontinued & only an online edition is appearing. No subscriptions are being accepted