It has been a long day of reviewing the budget by several individuals around India and the World. The Union Budget of India 2009-10 is in many ways playing through the traditional in-roads that have been established and taught in our Economics classes. I have been seeing lot of review of the budget and all seem to have given thumbs down for the budget except a few. Moreover, the media anchors who are supposed to be playing role of moderator when the guest comes seems to be fueling the problem by sedimenting a complete negative notion of the budget in the minds of the people.
Well if you ask me, I say the budget is fine balanced and in all sense it is a break even budget where there is no profit no loss in a literal sense. The budget covered several aspects of the economy considering the economic scenario. When I was listening to most of the comments people had to say, it gave me a complete notion that people are thinking only of their own benefit. I saw NDTV and was shocked to see Pranoy Roy who I have huge respect for seemed to be angered in every sense. But I would like to suggest all his guests and Pranoy who were speaking against the budget that most of you are not thinking from a Macro-Economic perspective. It's a complicated topic and area, but has almost a definite answer and 99.99% achievable solution.
First of all, a hue and cry why not disinvesting loss making sector by the government? All of you on TV screens were screaming money should be flowing in the economy so reduce taxes,allow private sector etc… But what about the people employed over there? During this recessionary period it is very important, to not dismiss people especially by the government. Because these people are having their jobs, they earn some income and this would be spent. Only then, expenditure of one becomes the income of another, and if you want government to sell off and give it to private sector who would implement firing of people who exceed the surplus requirement, then I would like an answer from all sitting and saying where would you give these people money? How can they spend when they don't have money? Where flow of money takes place in the economy? A coin has two sides. We have to look both the sides before giving a verdict simply against the government. So I give thumbs up for this move especially when the unemployment is around 6 % and not further aggravating the problem.
Secondly, disinvestment of 10 % is not enough? There is a common say in economics which says human wants are unlimited and always dissatisfied. Also there is another quote which we hear always,we have a problem with whatever is told or given. We have to understand the budget is now for these 9 months before the next one comes. Having said that, what is wrong with 10% disinvestment? In a way government is taking a bigger risk by losing 10% of profit making companies if it goes to private sector because they are losing the profits they can earn and use. I don't need to cite examples of private sectors profit oriented techniques that led to closure or insolvency of many companies and economic downturn round the world. This topic you look anyway can give you any argument. But I think its more than enough 10% disinvestment.
Thirdly, taxes are areas where government earns revenue and the corporate sector can't cry on not reducing the taxes or argue of perquisites being taxed. See for one thing, the corporate sector never pays the correct amount of tax to the government. They manipulate the books and accordingly pay the tax. If the government would get the tax that is lost through book rigging, I guess there would be substantial amount to fund many, many more schemes importantly. And when the government can't receive their revenue properly, why should they reduce the tax? Because whatever may come, the corporate sector has made sure they will continue to manipulate their books. So my suggestions are that corporate pay correct amount of taxes to the government and then only start blaming government. Until then, please maintain silence
Nextly, government expenditure on infrastructure is very important and a very good one. Because this again improves the standards in India on one hand and on the other ensures flow of money in the economy. When a country has good infrastructure there is chance of attracting others into the economy . There was a huge cry saying private sector has not got any chance of growth or they have been put aside. For a simple fact, the government is not going to be doing the infrastructure projects by themselves. They would call for tenders where all parties would be welcomed to participate and the best one would be selected. So please to all ignorant out there, remember not to forget the private sector has huge opportunity out there and if they do quality work, they would be rewarded.
And indirectly most of the people have problem of the governments stand on rural programs undertaken. People wearing suits on TV screens speak a lot of rural development, but in reality it's a complete lie. They don't care. They are interested in their sector and areas improving than the entire country. Most of the hosts and guests didn't say its bad, but they were using the phrase BUT, OR etc… it doesn't require rocket science to understand their displeasure. For once I see government doing something good for the rural people and I would be the first one to congratulate the government with all my heart if they implement it without any delay. If this becomes successful, we can say atleast the poor are not being poorer or not looked after. And for an award,atleast Congress is keeping upto the promise of the election to take care of the aam admi who elected them .
There are several more things I would like to add, but due to constraints I am not going to prolong it anymore. One thing we should understand that we should not compare the Economic Survey with the budget. That was just a survey giving its suggestions. If you say everything has to be implemented suggested by it, then I would like the corporate sector and the media to implement all the suggestions without any failure given by any of their employees. We have to understand there would be screening and different areas to consider before preparing the budget.
Moreover, budget is just a budget; there would be several other measures and reforms taken by the government in due course of time without just looking into the budget. For once, all out there, please keep confidence in Prime Minister Manmohan Singh for he has sufficient knowledge of what decisions are to be taken when the need comes. The government would keep on implementing several policies in the coming days and months.
Finally to all people who are blindly believing the media, a caution- they speak for their interest and for people who promote their shows. If not, they would have been able to protect your investments because they knew the economic downturn and which stocks are doing bad. Because most of us blindly follow them, they tried to pass on wrong information. This was recently exposed by Jon stewart of The daily show exposing and making Jim Cramer of CNBC come out and tell the truth on his show. Google it , you will find the videos and articles. I feel media should report like Jon Stewart.
TO all out there,if you look at an individual point of you, as an individual nothing much of benefit would be there. But atleast, start to be happy for the fact it is considered at aiming at reducing gap between the rich and poor. We always tell kids, to share and help others and support others to grow. If we are not going to stick to our words, then please don't tell all these lies.
Overall a break-even budeget. Further review in due course of time. So stay connected…
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