The extraordinary budget deserved praise not for what it promised but for what it has already delivered. Promises are, well, promises. For outlays to become outcomes, for announcements to become achievements or accomplishments, one needs execution. Execution requires political will, has to overcome political opposition and stakeholder resistance. That needs conviction and, of course, divine will or luck.
Therefore, the budget cannot be praised for its promises and announcements. It should be praised for what the MoF could have done and whether it did them. And, they did that very well.
They ensured that the budget gave a fair and accurate representation of public finances at the level of the Union Government.
The number of documents they had uploaded on the budget far exceeded anything seen before. That suggests a willingness to disclose rather than hide. It is a huge milestone for transparency and accountability.
It is very likely that all of these would be understood and appreciated by market participants over time and that would result in a meaningful decline in the India country risk premium.
Liquidity conditions in the developed world are unlikely to become tight. One can never say ‘never’ but the chances are slight to negligible. If anything, they may become even more accommodative. Put differently, the odds of them remaining accommodative or becoming more so are much shorter than them turning unfavourable for capital importing countries like India.
As important, if not more, other emerging economies are in far worse shape than they were at the beginning of the new millennium. Politically, economically and socially, they are far more uninviting than they were in 2001 or in 2002. Protectionist measures of nations is too famaliar an environment we have recently witnessed. India, in contrast and in relative terms, is an oasis.
That is why regardless of whether promises would be kept and announcements become achievements, the budget had greatly aided the likely spontaneous economic recovery by doing its considerable bit to reduce the country risk premium and thus the cost of capital.
The budget has done that by putting the considerations of a majority of its citizens on priority – the farmers and the youth in the rural sectors.
The recently earned international attention to the farmers protest thus confirms vested interests of the West in perceiving India for its FDI schemes !
Or, take for example, the forthcoming reforms of the National Education Policy, which would raise an eyebrow of even the naysayers.
Here’s what the NEP proposes
– A degree level full-fledged online education programme to be offered by the country’s top elite educational institutions to students belonging to deprived sections of the society and those who do not have access to higher studies.
– India to be a preferred destination for higher education under a ‘Study in India’ programme and an IND-SAT exam is proposed in Asian and African countries for bench-marking foreign candidates who receive scholarships for studying in Indian higher education centres.
– Steps are also being taken to enable sourcing of external commercial borrowing and FDI so as to deliver higher quality education.
India, unfortunately, is plagued with Inequality and poverty — both have been exacerbated by the imbalance of economies — and have given rise to the spectre of exclusion; internet connectivity, access to digital video devices and affiliated infrastructure are still either threadbare or non-existent in vast swathes of the country, leaving many students, especially those from vulnerable constituencies, excluded from online classrooms. Students are also plagued by structural challenges; even though India is home to the world’s second-largest internet user base, the quality of digital connectivity is uneven, with metropolitan India faring better than the hinterland.
And what would a virtual university mean for students in restive zones — Jammu and Kashmir is a case in point — where internet services are frequently disrupted by the powers that be?
Like every policy change, the ongoing reforms promises economic growth with humungous opportunities to build the necessary infrastructure for growth and employment locally. Companies, educational institutions and individuals that learn and relearn to align themselves in this new ‘gold rush to the villages’ will be making a big impact in the communities they serve.
So, let me conclude by sharing the eternal wisdom embedded in a beautiful prayer:
God, please give me the courage to change the things that I can;
Give me the serenity to accept things that I cannot and
Give me the wisdom to know the difference.
It is evident from the budget presented by the Madam Finance Minister that they prayed on these lines and that their prayer was granted by the Lord!
Views expressed above are the author’s own.
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