Union Budget 2019-20: What India Wants From The FM

Budget session of the parliament of #India is likely to commence from 31st of January and the Finance Minister is slated to present the interim Union #Budget2019 for the nation on 01 Feb. In the backdrop of demonetization, GST and the results of 5 state’s election, we are expecting a sop laden budget from the government.

Story so far:

This is the final budget of the present government. This government came to power with a lot of promises for the people of India. “Acche Din” and “Sabka Saath, Sabka Vikas” were the much sold out dreams to 1.3 billion aspiring pair of eyes. Unfortunately, overall performance of the government remained mere average and aspirations of people remained unfulfilled. 

Finally people spoke through EVM machines and gave thumps down to the government in 5 states. Sensing defeat in May 2019, government has started offering doles. 10% reservation for economically poor classes from the so-called upper castes was passed through parliament within the record 48 hours, and is set to become law through constitutional amendment No. 124. We sense that government will keep showering sops to gain the seat of power again.

Here are our high level guidelines and expectations from the budget:

Philosophy:

Presenting budget is not merely an exercise for allocating money to various heads as a typical accounting practice. Budget is not just to know, what has become cheaper, and what dearer. It is beyond. It sets the tone for the future of the nation. We suggest that, the theme of this budge must be, ”Prosperity with Peace”.

Review of performance:

We suggest that during the first hour of budget presentation the Finance Minister must present the report card of previous year’s budget announcement. It will help in self-review and the nation can judge the past year’s performance.

Education:

Proper education is the biggest emancipator. As the world moves towards 4th industrial wave, only highly educated will survive and flourish. It is imperative that holistic, proper and affordable education is provided to our future generations.

Farmers:

Recently loan waivers have been announced by some state governments for farmers. Waiving loans is not a solution. Even direct transfer benefits won’t be very helpful. Now time has come to move up in the 4th industrial wave. Agrarian economy is a obsolete model. Farming must be technology based, co-operative in model and agro-processing based. Farmers must set up their own marketing organisations, wherein they are able to bring their produce on the Farm2Kitchen model. Easy credit must be offered to the farmers. Local moneylenders are exploiting them too much.

Government must come up with policies to bring the farm labors to low skilled industrial and service jobs.

Healthcare:

Come to Bangalore, you will see hospitals which will make even five star hotels blush. Do we need such hi-fi hospitals? We need healthcare, not five star facilities. Public health care system must be strengthened for the welfare of masses.

Employment:

Huge unemployment is one of the biggest problems which the nation is staring at. Now time has come for government to tell in clear terms that it cannot offer job to millions. Government must act as an enabler to create job-creators.

MSME:

Backbone of MSME (Micro Small and Medium Enterprises) is completely broken due to twin shocks of demonetization and GST. It is high time that government offer huge succour to this extremely bruised sector. GST filing must be made extremely simple for MSME companies. GSTN was full of glitches and small entrepreneurs had to waste their precious man-hours in struggling to file the GST returns through this extremely clumsy tool. We suggest that all the late fees levied upon small entrepreneurs must be refunded. There must be nil late fees on late nil GST return filing.

Though the GST rates have been reduced in recent times, but we feel, still there is scope of reducing the rates on lot of items and even on services.

Government can come up with policies to offer daily loans on very nominal interest rates to willing parties. It will eradicate the mafias of local moneylenders.

Ease of doing business:

On World Bank rankings, India may have improved on ease of doing business index, but on ground level, still it is extremely difficult to start and run your business, especially a small and medium size business. We expect that compliance structures must be made extremely simple especially for small and medium size entrepreneurs and start-ups. Retrospective taxes must be forbidden. Headache of Angel Tax must be curbed.

Start-ups face entry barriers. For small assignments also, in tender, companies will demand minimum 3 crores turnover. Which start-up will have turnover of 3 crores in their initial years of inception, more so for service companies?

Non Performing Assets:

Huge NPAs of banks have created havoc for the overall economy. We suggest speedy resolutions of all the cases. Seems resolution process is being vitiated by vested interests and additional levels of difficulties are being created. This must be checked. At the same time erring bankers, rouge businessmen and their accomplices must be punished through special legislation. Economic offenses and industrial related offenses must be tried with speed, and justice must be served quickly.

Minimum balance charge by banks is nothing but GaribiKaLagan. This must be stopped.

Sops raining, fiscal draining:

Normally big policy level announcements are not announced in interim budget. But being in election year and having got 0-5 tally in recently concluded state election results, people are expecting that government will shower sops for all the stakeholders. Too much sops, without having proper Return on Investments will affect the fiscal prudence.

GDP not Grossly Distorted Picture:

Government must set up proper mechanism to evaluate and disseminate vital economic parameters without any iota of doubts. GDP numbers must not be revised in-between to suit the narratives to give a rosy picture. Confusion is the biggest enemy of business market.

Women empowerment:

Instead of 7 young ladies being escorted to the sanctum-sanatorium of Aiyaapa (Sabrimala) Temple, by 14 men, wherein even Gods would have showered rose petals on their path, herein we have everyday quibble over the entry of ladies into temple.

Young lady will be killed and burnt and nobody will care. Girl will file rape case and no action will be taken, and in frustration she will commit suicide. Cricketers and politicians will pass misogynistic comments and get away with hearty laugh. These are some common stories we read almost daily in newspaper.

We need to change the mindset. Thank God, MeToo did its bit.

Government must come up with various policies to encourage girl child from their birth till their career, and beyond.

Minorities along:

Nation belongs to all. No one is at the mercy of anyone. Nation develops only when all develop. Government must offer avenues for the development of Muslims, Christians and other minorities. Thrust on proper education for Muslim community must be the highest priority. Special focus must be given for the development of girls from the minorities’ classes.

Justice delivery system:

A nation which sits upon around 3 crores court cases can never develop. All these whooping numbers of court cases drag the economic and social indicators of the nation. There is no fear in the minds of criminals. They know the cases will drag for decades. On the other side it shakes the faith of law-abiding citizen in the system. We suggest that budgetary allocation for justice delivery system must be increased. Supreme Court of India must be made accountable to the citizens of India. Perjury and filing false cases must be dealt with iron hands.

Administrative reforms:

Steel frame of civil services must be made flexible by hiring lateral entrants up to Secretary levels. Civil Services must be renamed as Lok Kalyan Services. Mindset of civil servants needs to be changed. They are here to serve, not rule. Digitization of services must be done at center and state level.

Strengthening institutional autonomy:

How much reserve RBI must have, must be the prerogative of the RBI only. The day Finance Secretary will start preaching about reserves to RBI, RBI will cease to exist. Yes, government is accountable to people. But organisations like RBI and Niti Aayog are professional organisations, they must be kept away from the political battles of the government. Government must make sure that the autonomy of all the professional organisations is strengthened. Government must appoint extraordinary professionals of high standing to such institutions. 

Tweak needed in schemes:

Schemes which are not giving proper ROIs must be tweaked. Clean Ganga and Skill Development Program come to our mind for proper tweaking and implementation. Smart City concept is also not catering to the needs of the last person standing in the queue. 

Migration of rural population to metro and tier 2 cities is inevitable. It must be encouraged and proper urban planning must be done to accommodate this migratory population in the big cities.  

Gap between India and Bharat:

You visit any metro city. You will see glitzy software tech parks every 2 Kms. In-between almost ghetto like situation. To see the contrast between India and Bharat you need not visit any remote village. Here amidst Silicon Valley of India (Bangalore), lies the glaring contrast. As the world is moving towards era of AI, Robots, Big Data , IoT; capital is concentrated in few hands and only few players are controlling the businesses, these gaps will keep increasing. Good education and entrepreneurship opportunities for all, will help in reducing this gap.

Corporate governance and corruption

PNB fraud, huge NPAs and IL&FS saga point towards the extremely poor standards of corporate governance. In India, business means making money, by hook or by crook. We expect some measures to strengthen the corporate governance standards.

Corruption is the mother of all the problems in India. Corruption has become part of the DNA of this nation. Nothing moves without greasing palm. We expect some solutions for this intractable problem.

As the saying goes, fish rots from the head. We suggest that electoral bond scheme must be made transparent. In its current form, it is nothing but allowing the auctioning of Indian democracy, that too anonymously.

Man more important than cow:

Lynching, mob violence and everyday quibbles over cow and religion have become a new norm. Such non-sense issues drain the energy of the nation and drag her backward. Whatsapp does not spread the rumors, it is the unscrupulous politicians who stoke the flame and then anti-social elements take the advantage of situations. If someone is feeling aggrieved, he and she will say it, as it is. No one must dare say to them, to go to this nation or that nation. People are supreme. Everything flows from people. Nations and constitutions are for the welfare of people. People are free agent of this cosmos. Peace is indispensable and even more important than the economic prosperity. Various measures must be taken by the government to tackle such menace.

Quality movement:

Miners are trapped. High rise buildings are catching fire. Under construction flyovers are collapsing. Roof top restaurants are catching fire. Metro girders are showing cracks... Underline thread is... no system. No quality. We need Total Quality Movement (TQM) in India.

Ministry of 4th wave:

India cannot afford hearing that Kauravas were test tube babies. India needs scientific outlook, not mythological stories. We suggest 4 new institutions of IISc standard must be set up. A new ministry of 4th wave, must be set up to work on the AI, Robots , Big Data , Analytics and futuristic technologies. R&D expenditure limits must be enhanced.

Railways:

Speed, speed and more speed. We shudder, when we have to go to long journey. For Bangalore to Lucknow, whopping 45 hours... Better not to enter the compartment itself. Government must pit airlines against railways. For 500 Kms journey use railways, beyond, use airlines. It is not only the railway passengers who travel with too much baggage, Indian Railways too carry huge baggage along. It must be pruned on administrative side and must be made more agile.

Taxes:

We are expecting some or other tax relief for almost all the stakeholders.

Conclusion:

Aspirations of 1.3 billion people need wings to soar high in the sky of prosperity and peace. Every budget is an opportunity to add wings to the aspirations of people.

Governments may come and go, but the nation remains. A visionary government sees beyond the short term benefits. It creates the policies which shape the future of the nation and makes it a part of league of developed nations.

In the the solemn words which King Lemuel's mother said to him:

“Speak up for people who cannot speak for themselves. Protect the rights of all who are helpless. Speak for them and be a righteous judge. Protect the rights of the poor and needy.”

And if we may add our own quote:

 “A wise king never becomes anxious for throne. He becomes anxious for the vision he is creating for the nation, and the legacy he will leave behind.”

Now over to you! Please share your valuable comments below. If you loved this article please like and share. Thank You!!

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Please browse also:

Budget primer:

https://www.slideshare.net/PKS_Management/union-budget-simplified

Expectations from Union Budget 2018-19:

https://www.dhirubhai.net/pulse/expectations-from-union-budget-2018-19-india-pramod-kumar-srivastava

Expectations from Union Budget 2017-18:

https://www.dhirubhai.net/pulse/thoughts-union-budget-2017-18-india-pramod-kumar-srivastava

Pramod is CEO of PKS Management Consultants, a generalist business management consulting and auditing company based at Bangalore, India.

With inputs from Radhika and Gowakshi. Both are Intern with PKS Management Consultants. Views are personal. 

Image credit: Google Image with respective trademarks.