Saturday, February 28, 2015

Betting on a better future

Union Finance Minister Arun Jaitley presented the 9-month old Narendra Modi Government's first full Union Budget today that, after a very long time, was a political statement with a vision and a plan for the country. Make no mistake about it = Modi has a long-term plan going and he does not plan to be voted out in 2019. And Budget 2015 is a step in exactly that direction. Of course, for anyone who has followed Modi in Gujarat, this is not a surprise.

The Union Budget therefore, was not the 'big bang,' desperate sort of budget we have seen in 1991. It is a steady move, but a firm one as well and directly moves towards creating jobs and infrastructure in the country while also fighting poverty in a targeted, measurable form. The budget takes advantage of the Modi Government's single-most important achievement - the Pradhan Mantri Jan Dhan Yojana - to make a concrete step towards a cashless society and eventually a society where money can be tracked and taxed fairly, which is the final step in stopping black money. Through the use of Digital India, the budget is pushing more tax-related affairs online and insisting on speed.

The Budget takes important steps towards building a social security net for the country, which is absolutely necessary if labor laws are to be amended in a politically feasible manner. By way of a 42% transfer of tax revenues to states, the Central Government has firmly put the responsibility of primary and secondary education upon the states themselves, thus ending the raj of the Delhi bureaucracy. At the same time, new announcements for higher educational institutions, including the long-held demand for upgrading ISM Dhanbad into IIT Dhanbad, have the potential to scale up employability in the country. To that extent, it also aims to make use of NITI to foster innovation and eliminate red tape. As of now the budget still uses the concept of plan and non-plan expenditure, but this will die an eventual death once the current and last Plan expires, as there is no Planning Commission left to create any more plans.

The Union Finance Minister has also indicated that he will tread on Prime Minister Narendra Modi's path and has given up the unrealistic fiscal roadmap of P Chidambaram's UPA2 Budget, which was achieved only through cut in capital spending, which is of course incompatible with the new philosophy of the NDA Government. Despite this, ratings agencies have not taken a negative view for what many have called the last shining star in the emerging world. In addition, he has taken the good features of the UPA's DTC and junked the rest, and announced April 1, 2016 as the date when the GST would be enacted and India would be transformed forever.

Quite unlike previous budgets, this one was not a mere statement of accounts. It marks a fundamental shift away from Delhi raj, with states choosing their own paths. It works towards creating jobs for the hundreds of millions of young people who will enter the work force in the new few years. In short, it sets the stage for the acche din that all of us voted for. And the credit goes entirely to FM Arun Jaitley and the Prime Minister of the strongest Government of India in 30 years - Narendra Modi. 

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