India’s budget speech took two hours; it could have been done in ten minutes

One in every three malnourished child in the world lives in India.
One in every three malnourished child in the world lives in India.
Image: REUTERS/Adeel Halim
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The most common response spawned by this year’s budget seems to have been a joke on the Rs100 crore figure.

There were 28 instances of Rs100 crore ($16 million) announcements in the union budget presented by finance minister Arun Jaitley on July 10, his first and BJP’s maiden presentation, after a 10-year break from government.

A quick glance by our data journalism site IndiaSpend shows that the proposals could have well been (broadly) divided into five segments of Rs500 crore each, covering agriculture, education, tourism and so on.

The 28 instances have obviously drawn criticism, mostly because the amount seems so small and the tasks so large, in contrast. Take for instance, the Rs100 crore for metro projects in Lucknow and Ahmedabad. How do you build a city-wide metro system for Rs100 crore? Or, a Rs100 crore National Adaptation Fund, to manage the vagaries of climate change, no less.

Obviously, the amounts set aside are indicative and might at best trigger some preliminary work in the area, feasibility reports and the like. Or signal to the affected folks to calm down, at least for the present. And if I might add, somewhat cynically, help herd bureaucrats and government staff into shiny new buildings.

There are two things we need to note about this approach. First, of course, the signalling. In calling attention to newer projects, the government is saying it is doing something about an issue and what better place to say it than a much-watched and tracked budget speech.

The other part is that some of these allocations might actually never get picked up (so the signalling assumes even greater importance). This happens due to various reasons, including bureaucratic wrangling and the inability of the states to draw down effectively. For instance, the budget announced Rs3,000 crore for police modernisation. Fact: only 32% of police modernisation funds allocated last year were utilized.

Which brings me to the larger point. These Rs100 crore allocations are minor drops in the vast ocean of things that need urgent fixing in this country. The government correctly identifies some of these challenges in the budget. But there are no allocations mentioned against them. But if the government sets out to do serious work in these areas, everyone will forget the Rs100 crore allocations and the jokes associated with them.

Here are ten such statements from this budget:

  1. The problem of black money must be fully addressed.
  2. Bold steps are required to enhance economic activities & spur growth in the economy.
  3. A stable and predictable taxation regime which will be investor friendly and spur growth.
  4. Setting up an expenditure management commission to look into expenditure reforms.
  5. Wage employment with more productive asset creation with linkages to agriculture would be provided under MNREGA (the previous government’s rural employment scheme, seen by many as a dole).
  6. National programme in “mission mode” to halt deteriorating malnutrition situation in India to be put in place within six months.
  7. Simplification of norms to facilitate education loans for higher studies.
  8. Technology-driven second green revolution with focus on higher productivity. This will include “protein revolution”.
  9. Nationwide “District-level Incubation & Accelerator Programme” for incubation of new ideas and necessary support for accelerating entrepreneurship.
  10. Roads needs huge amount of investment and the process of clearances need to be simplified.

Let me pick two from the ten—black money and the programme for malnutrition.

The first is already the subject of a Supreme Court exercise, with a Special Investigation Team (SIT) constituted under the former Supreme Court judge M.B. Shah. The budget has allocated funds to this team as well, around Rs9 crore for infrastructural and logistical needs. The government has been making some noises about reaching out to the Swiss banking system. Most of these are just that—noises. It increasingly appears that we will find little. Mostly because that money is no long there and the tracks have been erased.

But a solid effort to weed out black money, whether from Swiss banks or more importantly, within the country, goes a long way in giving confidence to existing tax payers. India incidentally has a very low tax base—less than 3% of the population files tax returns. Note that filers don’t mean payers. And less than 43,000 individuals in India show an annual income of over Rs1 crore ($166,000), less than the price of a two-bedroom apartment in the distant suburbs of Mumbai. So if we were to really fix the problem of black money, then the economy would benefit immensely as would the average citizen, by way of services delivered.

The next is malnutrition.

Almost half of India’s children under 5 years are malnournished. More depressingly, one in three of the world’s malnourished children are in India. India is headed for a figure of 33% malnourished children by 2015, from its current 44%, while the target under the UN Millenium Development Goals (MDG) was 26%. It’s not just missing the target but India fares very poorly when compared even to BRICS countries. The corresponding figure for China is 3% and Brazil is 2%.

No point getting into a lengthy policy prescription here but the challenge of malnutrition is massive. And fixing it will have a significant bearing on the country’s children, youth, their health and future. There is nothing more to be said. And lots to be done.

There are eight more but all are very powerful in their prescriptive capacity. “Bold steps for enhancing economic growth” is a sufficient enough statement for me if the folks behind it are really keen to do something. The bold steps can follow and in my mind don’t need full articulation now. Ditto with fixing a draconian tax system which seems to penalise and harass small tax payers the most. While the millions who are out of the net make merry.

The union budget cannot be expected to say or do much on every aspect of policy. And that’s not the issue. The issue is what really matters. A Rs100 crore here and there or focus and execution in fixing India’s real problems which have remained with us for decades.

Think about it. If this government can show it means business, all it needed was a ten-minute budget statement with ten key agenda points. Which might be most television unfriendly and rob us all of the ritual spectacle that we have come to expect. But ultimately that is what we need—a statement of priorities without distraction. The rest is a matter of detail which folks like us in media can dig out later.

If the focus is on the outcome, what matters is the quality of the prescription, not the size or the number of bullet points in it.