Expectations From Union Budget 2018-19 Of India

BJP led central government in India is going to present its final full #Budget2018 on 01 February 2018. Already the symbolic “Halva Ceremony” of Finance Ministry has taken place and the road-map which will affect the 1.3 bn people of India is under printing. The entire Nation is eagerly waiting for the announcements of various schemes and sops by keeping the fingers crossed. We have very high hopes from this budget. Here are our thoughts on the budget:

Story till now:

When in May 2014, BJP government under the charismatic leadership of our beloved Prime Minister Shri Narendra Modi took over from the previous “corrupt” regime on a huge mandate; people had a lot of expectations from the current government.  There was euphoria all around, and we all were expecting the much promised “Acche Din” for all of us.

Years passed “Acche Din” were nowhere to be seen. People started becoming restless and started questioning about those much promised “Acche Din”.

To be fair to the government, it came up with a lot of schemes in the budget of 2015-16 and few schemes were successful too but the majority of the schemes fell flat on their face. They became mere Sarkari slogans. Ujjawala Scheme, Account Opening Scheme, Digital India, Maternity Leave Scheme, De-registration of thousands of fake companies, Insolvency Law, Rural Electrification projects and some other projects under the Ministry of Surface Transport were certainly successful. The most striking feature of this government is of fighting corruption on a massive scale with great boldness for which it has got its name written in golden words in the pages of the history of our nation. Now the trend set by this current government will have to be adhered by the future governments, whether from the same ruling alliance or from the opposition.

However, Ganga Mission failed miserably, she remained dirty as ever. Under Skill India Mission, even the concerned Minister could not get the skill to the drive the program properly and had to resign. Start-up India could not start properly. Make in India could not make any impact. For Smart City project, even smart people could not decipher what Smart means in our context and all MNC companies envisioned of hi-fi concepts of IOT, BIG DATA, AI, hyper-connectivity and whatnot, whereas, most basic amenities which are missing, were side-lined. For all the major problems the previous regime was held accountable. After 3.5 years in power, blaming the previous regime does not make any sense, moreover when the previous regime was punished for its alleged acts of omissions and commissions and the current dispensation was brought to the power with thumping majority. So overall picture was getting dusty and people were getting confused. This ship had started drifting in a whirlpool.

Then came the bombshell of that infamous 8th November 2016, when at the stroke of midnight, 86 % currency circulating in the market was declared invalid through demonetization. This demon of demonetization harassed each and every one, be it individual or corporate. Large corporates had the wherewithal to absorb the shocks, but smaller entrepreneurs were devastated. Big individuals got their currency exchanged, but the poor person had to stand in serpentine queues for hours to get the exchange of his net worth of single 500 rupee note. What was the real benefit of this ill-conceived scheme? Till now there are more questions for every single answer. Anyway, as the saying goes, “this too shall pass”, these painful days passed.

As the people and corporates were just licking their wounds, another shock came in the form of malfunctioning GST. Last year, it was sincerely appealed by us in the same column to the current dispensation that already there has been too much of damage due to demonetization and no further experiment should be done without proper preparation. To our dismay the malfunctioning and muddled GST system was thrust upon the nation. The market was not prepared for this second shock. Businesses went hay-wire.

Where the ship got drifted:

In governance, two things are essential; cleaning and creation. Cleaning the weed from the system is a negative concept but necessary one. Creation means development activities. New schemes and projects which will help in the positive progress of the nation. Unfortunately, current dispensation got too much involved in the cleaning process, meanwhile losing the focus on creation.

Too many schemes, too many acronyms, ill-conceived and poorly implemented policies and no benchmarking brought us to this nadir. It is very clear that the various advisors to the government did not do their duties as expected. Doctor and advisor should always speak the truth and guide properly, even at the cost of losing his job. Unfortunately, advisors either kept mum or were not listened to.

And the result… GDP started slipping quarter after quarter and hit to the rock bottom of 3-year low of 5.7% in April-June quarter of FY18. 

Now in the backdrop of this story, the nation is looking towards the Finance Minister Shri Arun Jaitley and expecting some succour.

If we have to summarise the overall current situation we will use only one word – Confusion. And what we need is – Course Correction.

Just a few parameters will guide any Finance Minister to gauge the current situation of the nation like; huge unemployment, dwindling GDP rate, 3 crore plus pending court cases, huge NPA of banks, media reports of alleged hunger deaths and the violence being orchestrated by fringe groups. A set of these pointers will galvanize any Finance Minister to create a wonderful and well-balanced budget for its people.

Our expectations:

1. GST slabs must be revised properly and GSTN should be improved. Meanwhile, corporates must be given time to file their returns. The Damocles sword should not keep hanging on their head. We suggest that GST turnover limit should be brought down to 1.8 Lakh / Year. It will widen the tax base and above all, change the mind-set of people, if you are doing business and earning, please pay tax. GST filing should be made as simple as possible.

2. It is ironical to see the government announcing slogans for women empowerment but having the GST on sanitary pads at the same time. To raise their voice, women had to trend the hashtags on social media to reduce the GST rate on sanitary pads. All the items or service, which help empowering the women should be at minimum GST rates and wherever necessary, should be at zero percent.

3. Start-ups and small entrepreneurs have been hit extremely hard. Animal spirit should be brought into with full vigor to revitalize the backbone of the market.

4. Corporate Social Responsibility (CSR) laws should be made stringent as Organizations are not adhering to this rule as expected.

5. Huge unemployment is an extremely serious issue which the nation is facing. It is a fact that government cannot provide employment to all job-seekers. Now the time has come, when the government should propagate the concept of self-employment and should become an enabler for the youths in getting them on their own feet. Youths should not become job-seekers, instead they should become job-givers and government should work on these lines.

6. Until and unless a nation produces its own products or services, she cannot prosper, and for producing the products and services, innovation is paramount. Government should create an eco-system at the grass root levels to encourage the innovation.

7. Knowledge-based industries are going to rule the world in future and developing a Knowledge Worker requires proper education. Government should strengthen the education sector so that its future generations are highly educated and can contribute to knowledge-based industries.

8. The traditional farming methods followed in India need to be revamped. No farmer can prosper if he has just 2 bigha land. And with tilling it in traditional ways, his fate will be always in the hands of rain God or the local money lenders. We suggest cooperative farming where hundreds of bighas are sown and the yield is divided to land owners. Horticulture, floriculture and sericulture etc. should be promoted. Supply chain system i.e. from “farm to plate” should be improved so that farmers can get better price on their yield, at the same time common consumer gets commodities at reasonable rates.

9. Swacch Bharat Abhiyan has captured the imagination of the nation. But there is a catch. Yes, it is the responsibility of each and every citizen to keep his / her surrounding clean, but cleaning is the primary responsibility of municipalities. Unfortunately, almost all municipal corporations of our nation have turned into a den of corruption where politicians rule for their own benefits. Path-breaking reforms in municipalities are the need of the hour.

10. In the previous budget, some measure of funding for political parties was announced and some work has been done in that direction. We are of the view that in its present form, “Electoral Bonds” are going to become instruments of defrauding the democracy. We need to have more transparency and above all ask ourselves, why a huge sum of money is required to be elected.

11. Whenever India buys items from Israel, USA, and France etc. before signing on the dotted lines, she should pause and reflect. Why can’t we create our own railway engine, airplanes or even missiles? All the prosperous nations of the world are creating high-value items and on the strength of that only they became prosperous.

12. Allowing FDI in retail will make India the biggest shopping mall on the earth. Just a few thousand young girls and boys will get at most the jobs of a salesman, but the real benefit will go to the native nations of respective MNCs. We must create our own products and export to the world. For this to happen, change in mind-set is required. Once government formulates supporting policies gradually entrepreneurs will start creating their own world-class brands and will earn money for the nation.

13. When 1% of the population owns 73% of the wealth of a nation, any GDP figure will be a farce. If a nation’s wealth is concentrated in a few hands it is not prospering. By giving business opportunities to youngsters, women and minorities this gap must be reduced.

14. In our country, there is a mother of all the problems - we do not benchmark. For us, status quo is the most comfortable position. We propose a new economic indicator – HGI (Holistic Growth Indicator). This indicator will be a summary of GDP, Gini Factor, Hunger Index, Development Index etc. and of course Happiness Index.  

15. Budgetary allocations for Judicial and Police Reforms must be increased. We must not only aspire to be a prosperous nation, but also to be a peaceful nation. Prosperity and peace both feeds each other. Unless we are peaceful, we cannot attain prosperity. We cherish our past. Periods of King Chandra Gupta and Ashoka the Great, were the golden period, because then, prosperity and peace coexisted.

16. In the civil aviation sector, low cost airlines must be encouraged to operate in India.

17. Aadhaar issue has created a lot of bewilderment. Government must be very clear about its purpose and about its security feature. It should take the people into confidence and then move forward for its further implementation. Let alone from cradle to grave, this Aadhaar is there everywhere.

18. In all government ministries, 30 percent reduction of staff and officers must be implemented in staggered manners. Simplification of processes and computerization can offset this reduction of headcounts over time.

19. Sustainable development should be given priority in the budget and government must support the use of solar and wind power etc.

20. India can be termed as a country of freak accidents. Under construction flyover bridge will collapse, boilers will blast in a thermal power station, a devastating fire will swallow the lives of workers in illegal factories, kids will die in hospital due to non-availability of oxygen cylinders… and the list continues. What is the underline factor here? It is non adherence to quality norms. We strongly propose that a National Level Movement for Quality must start. We need Joseph M. Juran(s) for India, who can enlighten the nation about the importance of quality. 

RAILWAYS:

21. Indian Railways has become “Bullock Cart on Rail”. We need to speed up our trains.

22. Catering and cleaning contracts of railways must be awarded at district levels to the local young people. It will help in generating local employment as well reduce the wealth getting created into a few hands.

23. Railways should hire more and more lady loco pilots and guards.

24. Indigenous technology should be developed and applied for railway safety and human intervention must be reduced in a phased manner. It will promote innovation and entrepreneurship, at the same time, railways can have optimum number of employees.

25. There is a sentiment that since it is the last full budget and next year elections are going to happen, government may not opt for presenting big-bang and path breaking budget. To our mind, this is a fallacy. A statesman government must do whatever it takes to shape the destiny of our nation and its 1.3 bn people, election or no election. The government may come and go but the nation continues and a great government never thinks in short term, it has vision for the future and works accordingly. Moreover, people are wise; they can see through the intentions of the government and will reward it handsomely during 2019 elections. 

Summary:

By nature India is a very humble and contented nation. She used to live in huts happily, but now no more. Her aspirations have got wings. She is willing to soar very high in the sky. Every dream in the eyes of 1.3 bn people of India needs wings. Whenever any Finance Minister presents his budget he provides energy to those wings. We hope that with this budget our Finance Minister will empower this “Sone Ki Chidiya” (Golden Bird) to soar higher and higher in the sky of prosperity and peace!!

Now over to you. Kindly share your comments below. Thank You!!

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Pramod Kumar Srivastava is CEO of PKS Management Consultants based in Bangalore, India. 

Ms. Varsha Doddamani is intern with PKS Management Consultants. Views are personal. 

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