What Made Experts Worried About Budget 2016?

The finance minister appears to have done an admirable job with limited resources, but a closer reading of the revenue estimates and expenditure plans has experts worried.

- Prosenjit Datta

Almost a month and a half before Finance Minister Arun Jaitley rose to present his third Budget, the government had already started sounding off the people about its main worries. In public pronouncements , Prime Minister Narendra Modi, finance minister Jaitley, and his deputy, Minister of State for Finance, Jayant Sinha, spoke increasingly about rural distress and the overall gloom and doom in the global economy. The fact that the government felt that the only way to address the issues was through increased public expenditure, especially on infrastructure, also found mention. The huge mass of non-performing assets in banks and the need to clean them up was voiced. As did the urgent requirement to boost manufacturing, create a hundred million jobs and provide a stable taxation regime.

A couple of weeks before the Budget, the Prime Minister reiterated the necessity for jobs in the grand, week-long Make in India programme in Mumbai and the need for a stable taxation regime that would not penalise investors. And, just a day before the Budget, on Sunday February 28, Prime Minister Modi spoke of his dream of doubling farmers’ income in five years.

In essence, what the Finance Minister needed to do while presenting the Budget proposals were pretty clear in the run-up to the actual speech. The question was:whether he would be able to tackle all the issues the government had identified, given that he had presented two fairly lacklustre Budgets in the past. The second question was: given the fact that the economy needed a stimulus to stay in the 7 per cent-plus growth rate, would he breach the fiscal deficit targets.