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Budget 2014 path ahead to recovery

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Budget, as an annual fiscal exercise of the government serves as a guide to meet the growth
trajectories of the nation and to attain inclusive development with redistributive justice.
Finance is the life blood of any organization; imagine India as a huge organization where Budget acts
as a tool for socio-economic development. Budget 2014 ushers the aims and objectives of the newly
formed stable government to put the economy back on track after abysmal performance of low growth
in past few years. It inherited low growth, high inflation and high fiscal deficit, the expectations of the
nation soared high to fix the ailing economy along with sabka saath sabka vikas. The intention of
the government is clear, it not only targets to fix the economy by bringing house in order but also
makes an departure from the policies of previous government which was based on entitlements and
legal rights away from actual outcomes in terms of endowments and employment, the present
government wants the young and vibrant India to participate in growth and empower tomorrow
through skill and expertise.
At one end Government aims to reduce fiscal deficit to 4.1% and rein in the unexpected levels of
inflation through fiscal consolidation and management and accelerate the growth to 7-8%. It is
important to remember that resorting to deficit financing and external borrowings only strains the
economy in longer run with unmanageable interest payments inducing uncertainty and low investor
confidence. The desire to meet the aspirations of the people through higher growth and faster decision
making has been articulated, but how the measures in the budget are expected to help these have not
been clarified.
The common man got an expected welcome through raise in basic Income exception limit from Rs 2
lakh to Rs 2.5 lakh, investment limit under 80 C in Income tax act has been raised to Rs 1.5 Lakh
from Rs 1 lakh. Many household goods like electronic gadgets and footwear got cheaper with duty
cuts. The sin tax on cigarettes, cigars and other tobacco tax has been increased.
On a macro level there is concerted push towards infrastructure, education, health, water with
increased allocation. Promoting Foreign Direct Investment (FDI) in strategic sectors like defense
production and insurance will promote more domestic jobs, another major boost up to generate
resources is through disinvestment policy and Public Private Partnership(PPP) for major infrastructure
projects. Departing from earlier policy where social sector spending in the name of common name
through higher outlays year on year severely crippled the economy through populist schemes, this
year there is no major change in social sector spending however intent is there to focus on outcomes
and asset creation through flagship programmes like MNREGA. Rationalizing subsides through merit
and overhauling the entire subsidy regime including food and fertilizer in future was also highlighted

in the fiscal roadmap.

India primarily being an agrarian economy with more that 50% of people dependent on it got real
boost through the aid of technology, increased agricultural credit, rural infrastructure development,
PDS reform, dedicated Kisan Television, FDI to fill the gaps in critical areas and aiming for a new
green revolution in agriculture through technology and optimum utilization of resources taking
environment constraints into consideration. Another major aspect was tax revenues where aim is to
widen tax base and revenue through simplification of tax regimes in both direct and indirect tax along
with implementation of Goods and Services Tax (GST) in future.
The new Budget is filled with hope and optimism, with limited time and challenges ahead only time
will tell how government will deliver in critical areas. However, the aim should not be only to ensure
growth but to create a conducive environment for opportunities, sustainable and continued growth,
channelizing entrepreneurial spirit of young India capitalizing the demographic advantage and
widening social security net for common man in India.
(The writer, Pramod Singh, a mentor and counsellor of students for various competitions i.e. Civil
services, CAT(Current Affairs, GD/PI)
Click here to attend a Free Demo class by Mindworkzz - Arun Sharma & Meenakshi Upadhyay
. (Renowned authors of Books for CAT)
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Maam.
Posted by Neha Wadhwani Tuesday, July 15, 2014 6:05:00 PM Categories: General Awareness
Pramod Singh's Blogs
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