A. Dis-incentivising or penalising savings is not going to increase consumption automatically. Indians are savers. As consumption patterns within and outside India would show, Indians like to splurge on non-essentials after creating a secure nest egg.
B. An environment of economic insecurity does not lead to consumption. When you give tax breaks to startups going bust, you have to remember that this here today gone tomorrow model of employment is creating a lot of negative stress in the talent and consumption market. Find a way to stop this environment of financial insecurity, esp in the job market.
C. In a country like India, the small trader and the bottom of pyramid hold the key to economic activity. The current budget allocations will not put the money directly in their pocket. The tax provisions will make it harder for them to do work. In a depressed economy, the small trader is the key to reversal. Because s/he is among the few entities in the system that are financially stable, independent, and profit positive. Further, the trickle down effect from the small trader to the bottom of pyramid is instant. Pay attention to the small trader.
D. The key to giving power to the farmer is to make it possible for him to trade on location and timing arbitrage. The best part about this Budget is that it hopes to give the farmer both - a series of village level storage owned and operated by women-led SHGs, and Indian Rail and airways working to give the farmer the location advantage. (the minister announced that both railways and the UDAN scheme will run special charters for agri produce). Today, we see goods shipped from one end of the country to another in a jiffy.This was unthinkable just half a decade ago. If the govt executes it right, buyrs will compete on a pan-India e marketplace for agri-produce, and shipping will be taken for granted. The power of that change will be immense. The FCI dreamed of this, but could not realise it. For the first time, the govt is using inland waterways. Since the agri-belts are typically around rivers, the sector is a natural beneficiary.
E. I cannot remember the last time the Finance Minister missed mentioning the Defence outlay in the Budget. The irony is that security is one of the key planks holding this govt aloft. In such a long budget, to not give credit to the defence forces, and equally importantly, the paramilitary forces , is a sore miss for me. The other sore miss is sports. If there is one sector in which India has seen a hockey stick growth curve under BJP, it is sports. Today, we win medals in pretty much every sport we choose. To miss the sports outlay in a budget speech was unfortunate.
F. It is fantastic that the minister has earmarked 103 lakh crores (thats 10 to the power of 12, by the way), for national infra pipeline. Heres a supplementary question - after this awesome highway, waterway, etc. is built, who is going to ensure that it remains usable? Highway Patrol and policing. Policing may be a state subject, but I do believe that police reform is one fo the top 3 priorities for India today. And the center could have "urged" the states to collaborate on a national project involving police reforms, peer benchmarking, and experience sharing across states.
G. I also loved the focus of the FM on all the sectors in primary produce - horticulture, fisheries, dairy, irrigation, input costs, power, (the scheme that allows farmers to produce solar energy on their barren land, and then sell it to the grid if they would like had me going yooohooo), distribution, storage, et al. At 2.83 lakh crores, agriculture is not just the second highest outlay in the budget , it is also well distributed.
H. Why, in God's name, does Kashmir need 30,757 crores in a year? And Ladakh barely one fifth of that?
I. SC, ST, and OBC, between them, will get 1,38,700 crores. But no idea what this will be used for. How will we end caste based politics in this country? By officially creating caste based sops, like everyone else has done? I really thought BJP was different.
J. And now for my second most favourite part of the Budget: 3150crores for heritage and culture. India has history in literally every sq km. But it suffers from so much neglect and apthy. Every single Indian I know who has gone outside has come back to say, God we have so much, and we dont value it! Well, I am glad that someone is valuing it, and not just that, also realising the tourism potential of this wealth of history that we sit on and take for granted. The new museums, and the recurating/renovation of the historical ones, is so necessary. Not just that, the 5 sites that are going to be developed - that is going to be a tourism goldmine if we do this right. I am quite, quite looking forward to this one.
And that, ladies, and gentlemen, are my ten humble points on Budget 2020
