Union Budget 2013: A Fraud Upon the People
Prasenjit Bose is an economist and a Left activist.
The Union Budget presented by the Finance Minister today exposes the fraud that the Congress led government at the Centre is playing upon the Indian people, besides being clueless on the serious problems confronting the Indian economy; namely persistent and high inflation, all-round slowdown of economic activity and a widening current account deficit being financed by volatile and debt-creating capital inflows.
GDP growth has slowed down to 5% in 2012-13 – the lowest since 2002-03 – with growth in agriculture and manufacturing falling below 2% and all other sectors also witnessing downturns. In this backdrop, the Finance Minister accorded priority to maintaining the fiscal deficit at 5.2% of the GDP in 2012-13, as was projected in last year’s budget. Tax revenues have fallen short by Rs. 29000 crore and non-tax revenue by Rs. 35000 crore from what were projected in Budget 2012. With such huge shortfalls in revenue receipts, total expenditure was slashed by over Rs. 60000 crore in 2012-13 (almost 0.6% of GDP) from what was budgeted last year. While non-plan expenditure overshot the budgeted figure by Rs. 30000 crore, plan expenditure was cut by a whopping Rs. 90000 crore (almost 1% of GDP). Capital expenditure, which contributes the most to capital formation, was cut by Rs. 37000 crore.
It is surprising that none of the opposition parties have been able to see through this glaring deceit being perpetrated by the Finance Minister, which is an affront to the parliament that had passed the budget last year.
Such huge cuts in plan and capital expenditure in the backdrop of a slowing economy have no doubt aggravated the economic slowdown. Besides it has eroded the credibility of the budget making exercise, making all the allocations grandiosely announced by the Finance Minister in his 2013 budget speech look incredulous, indeed phoney. Next year’s budget is bound to reveal that much of these announcements are totally fraudulent.