 The first thing that has to be recognized is that this is an interim budget and there will be a new government and a new Lok Sabha in less than two months into the financial year to which the budget relates. And therefore, that government and that Lok Sabha will take the final call on the what is to happen for the coming year. So in that sense, an interim budget would not be a location in which you would have announcements about things which are about the future so much. So to that extent, announcements being made with regard to what will follow do not have too much of a significance really. And one would say that some of the promises being made about the future are promises that cannot really be made by this government and are being made only because perhaps the actual record of the last five years isn't that promising when people look at it. What is important to also see is that the budget that was presented today, every budget has projections about the future. It also has revised figures about what has happened in the previous year. So at the beginning of the year, there is a budget estimate which is a projection of what's going to happen in the coming year. And at the end of the year when the budget is presented for the next year, for the previous year you have a revision based on the trends observed. Now what also appears to be the case is that the government is concealing the real financial situation it is facing by actually showing revenue figures in the revised estimates which are going to turn out to be far higher than what will be the actual revenues. So if the trends available about revenues are such that they indicate that this year that is in 2018-19 which squarely falls within the term of this government, the revenues are going to be significantly below what was budgeted last year. But the extent to which therefore the revised estimate should have adjusted the revenue figures the government has not done. So particularly as far as income tax and GST revenues are concerned. So in that sense it is hiding a situation of grave crisis as from the revenue front which it is going to leave for the next government to therefore deal with or handle. Because what is going to happen as far as the revenue situation next year is concerned. So it is in some sense reflecting on what have been the measures that this government has taken in the last 5 years that all its supposed claims that these measures were going to generate more revenues for example demonetization was supposed to unearth black money more revenues. So where should you have seen that? You should have seen that in income tax but income tax revenues last year as well as this year are going to fall short of budget estimates. Same GST was supposed to be the big tax reform even today the finance minister said the biggest reform tax reform in India since independence. And what is happening as far as revenues from GST are concerned even there you see the poor. So it is concealing this true picture on the revenue front and it has so far managed to keep up its revenue situation somewhat by increasing the revenues from oil excise duties. Now that oil prices are no longer as low as they used to be it has become difficult to use that particular method and the failure on the tax revenue front on the tax front is really showing up. And as long as that condition remains and governments remain committed to maintaining a low fiscal deficit which is also claiming it is as its great success. As long as that is the case that taxes are low your shortage of revenues you want to maintain a low fiscal deficit it means you do not have the means to spend adequately on what the people need. Some part of the expenditure is basically spent on running the government itself. So what do you have left then for meeting the requirements of the economy and people. So in a sense what this budget is reflecting more than what it promises about the future is the situation that has been brought about in which the ability of the government to make a difference to the lives of the people actually itself has become circumscribed. So as far as the income tax concessions are concerned what is more important than the concessions is the absence of any significant measure to raise direct taxes. Of course income tax burden is borne by a whole large number of people who are not at the same income level. If one is interested in generating more revenues from income taxes then one has to have more measures which tax those with higher incomes more effectively and the higher rate and one has to have measures of taxing corporate profits which is the other source of direct taxes also to the extent that is required. The effective tax rates for the rich as well as for corporate taxes are very low and that is the problem that the government is simply refusing to try and address. So we need more revenues but we also need more revenues from direct taxes. Our tax structure is heavily skewed in favor of indirect taxes and indirect taxes are taxes that everyone pays it is regressive in nature. So a fair tax system should also be one heavily reliant on direct taxes. In India two thirds of the taxes come from indirect taxes. So there is no real genuine effort at increasing direct taxes so the only direct tax measure announced was a concession. So even if there are people who deserve to get some benefit in the particular income bracket there is no case for much higher income groups to get any benefit of tax concessions. So there should have been more measures of that kind taken earlier it was not taken earlier nor is there any indication that if this government is to return it will do anything like that. On the agrarian situation the fact that the government is today announcing at the end of its five years income support scheme is itself tells a story. And the amount of relief that is being offered is also telling a story. So if you are making the argument that an amount of 6000 rupees a month a year 6000 rupees a year of income support to a rural farming household which has four members as four rupees per person per day. If you think that that is a fairly significant support measure then you have to accept that their incomes are very low. Most of us would not consider four rupees a day extra as particularly significant change to our economic status. So you must accept that it is pretty low already then this is a would appear to be a significant measure. But if it is already very low then that means there is severe agrarian distress and you who has a government have to be answerable after five years as to why there is such agrarian distress. So really what has happened is that instead of spending what should have been spent on various measures to support the agricultural sector to generate higher incomes from that for those engaged in farming instead of doing that what it is doing is that it is. So what it is giving in a sense is one small amount which has been in some sense been taken away a much larger amount has been taken away by another hand what this hand is giving. So that is essentially what this measure amounts to and therefore it has no promise in terms of resolving the problem of agrarian distress that we see. Substantive measures to address that distress have not been taken in the five years and there is no indication about what those measures might be in the future. As far as the job situation is concerned of course the reality is that we are being told that lots of jobs have been created but what is the basis for that claim the basis for that claim it does not exist because there is no data to substantiate that proposition and the claim is that the data that is available is not correct because it is not substantiating this claim. So if I do not have the correct employment data how do I know how do I know that jobs have been created. So if simply the data is absent you can make any claim it does not mean anything the actual data that is available all reports are are indicating that the job situation is extremely bleak from different sources you get the same kind of data. And despite that the government is basically refusing to release the data fact is speaking if you release the data let the data be looked at closely examined and based on what is there in the data if you want to make a claim that this data or this estimate has these these these are specific problems and therefore this should not be taken as the correct figure then that is a proposition that can be debated and argued about but what you do is you suppress the data itself. So just as the revenue figures are being projected to be different from what is the actual similarly you are getting the same story as far as employment is concerned and because the government has been committed to essentially keeping expenditure low and not taxing the rich and the corporate sector heavily it has done very little in terms of actually doing anything for creating jobs. Minimum wages will go up over time because of inflation and other such things so there will be always some adjustments in minimum wages there is one minimum wages in this country there are several minimum wages in this country and you still do not know I mean that is only what is the prescribed minimum wage is not necessarily the actual wage because there is a question of enforcement which there is a different story what is the average level of the wage in this country that most people get and if by the government's own admission your annual income at 8 lakhs being below 8 lakhs puts you in the category of being economically backward relative to that what is the minimum wage in this country what is the wage that most people get see the scheme itself is supposed to be demanded so the expenditure allocations are not really something for a government to choose because if people need work you are supposed to give them and it has to adjust according to that okay so the but what has been happening is that while allocations are first made they are not necessarily spent and down the line you get a situation where the flow of payments gets stuck so that people don't really necessarily get the payments when they are due in this way the scheme has been kind of in a sense been undermined continuously so therefore allocations of that kind don't really mean anything and in any case if you look at the allocations that have been made relative to the allocations when the scheme first began over the period of time the requirement should have increased if there is a gradient distress then there isn't work in the agricultural sector people have to find other means the allocation should have increased significantly greater compared to that the actual allocations are way short of the mark so if you have minimum wages being increased if you have larger number of people having to be so therefore in the normal course that allocation should have had to increase so compared to the actual requirements have increased what is the if you look at the actual increases they are far short of the requirements yeah well the budget doesn't necessarily budget is not an exercise to address everything in the economy but the budget plays a very I mean the budget is supposed to reflect governments measures to generate revenues and to spend okay and how where it is going to get its money from where it is going to allocate to what ends is the purpose so it's one it reflects the way in which the government has one way in which the government has to affect the economic conditions okay and through the effect on the general economic conditions on the macroeconomic conditions you affect several other things so if economic activity of particular kinds increases certain activities generate more returns those who are borrowed for such activities would be in a position to repay it can affect NPS in that way okay but directly of course from budgetary measures what would is it it is not not not much that would be done to address a problem of NPS but yes the only part which could in some sense be affected if you provide assistance to write off the dates of some people like farmers etc there haven't been significant measures of that kind and but the government in other ways have facilitated writing off very large loans to large corporate houses but when it comes to say assisting farmers a very different attitude about what the country can bear and the financial health of banks and all these questions come up at that time the mudra scheme is also a kind of an example of the way the government has tended to approach what the different economic problems that are there that is you don't have you the minimum the minimum the government would do to affect the general conditions of people in this country is to use the power it has to tax and the ability it has to spend in an effective way to expand economic opportunities for large number of people in this country whether they are farmers whether they are workers whether they are in the formal sector informal sector who desperately need desperately need livelihood in order to sustain their lives okay so that's the minimum you could do and you could in the process also effect some degree of redistribution of incomes from those who tend to appropriate a disproportionate larger to those who get relatively little this is not a matter of giving anyone a dole after all the economic activity which generates the high incomes of some is not an economic activity that is done only by in which only they participate okay there are others who participate so if a if a corporation makes large profits it has workers employees who work to make that possible if they get very little then that's not a question of that they don't deserve it or anything it's the way the economic situation works out that they get very little and some people get a lot so there is every rationale for the government using its power to tax and spend to effect some degree of redistribution the economic realities of India today are such where the poverty of large sections of the people their inability to find work to find livelihood which would generate reasonable incomes for them which would allow them to improve the standards of living are not getting created and in them not getting created their own inability to spend is becoming a factor that because there isn't enough demand in the economy you don't have the expansion of economic activities which would create the employment so if people are not being able to find the means to spend because they are not finding employment then you have to find some way of creating that employment and the way to do that is to spend okay when you spend you firstly itself creates some demand and that in turn leads to some employment creation that employment creation leads to further demand and so on and so forth so that's the process that would be necessary but if your approach is that I am not going to spend then you are not able to do these minimalist measures now the problem of the Indian economy is that governments are stuck with trying to keep the fiscal deficit low keep the taxes low rather than addressing the real economic problems of the people and therefore they are left with only this option that if you are not going to spend so much okay then you pick out something here something there to make big announcements if you are doing a lot when you add all of the all that up it doesn't amount to very much okay factor the matter is the government in India spends too little the factor the matter is the tax to GDP ratio in India is way too low tax GDP ratio has to be much higher than what it is expenditure has to be much higher than what it is neither of these is happening nor is there any movement towards higher tax GDP ratio higher expenditure all the data is there to substantiate this proposition so only claims are made that we are doing this and doing that but the reality is too little is being spent and too little is being mobilized and nothing is being done about changing that if you look at all the thing that has happened in relation to cows or you look at the demonetization exercise of the government actually in you could say that when you are not able to genuinely offer people the chances of an improvement in life improve their economic prospects give them jobs when you can't do that you try and mobilize people support through other means okay and sometimes these other means can have even more adverse effects on people's economicalize demonetization was a classic example even all this thing about cows and all is also reflecting the same thing so these are this is a politics which is directly disrupting economic activity in a situation where economic activity in any case is not of an order which would allow significant section of the Indian population to find reasonable and secure means of livelihood what one can say definitively is that any claims to have made a significant difference to the conditions of the people or to their prospects in a positive manner then such claims would have no real basis in large majority of Indians today face more uncertain prospects about their economic future than they did a few years ago and that's the unfortunately the direction in which the economic situation is heading