ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Putting the Cart before the Horse

Agri-food in the Union Budget 2019–20

Putting the Cart before the Horse

The 2019 union budget has neither proposed any bold policy moves, nor any big allocations for investments in the agri-food sector. What it has is massive welfare programmes, predominantly the remnants of its predecessor government’s welfare policies. It appears that India has already become a welfare state before generating enough wealth. Has the budget for the agricultural sector actually put the cart before the horse?

Every finance minister wants their first budget to be a path-breaking one in giving fresh impetus to the economy, unleashing the “animal spirits” of the investor community and above all, raising the overall economic growth with due safety and stability. In this aspect, the first budget speech of the union finance minister, Nirmala Sitharaman, if not pioneering, is definitely resplendent in laying out a 10-point vision for making “a $5 trillion economy of India by 2024.” Such a vision about the evolution of the economy cannot be accomplished merely by crunching numbers in the budget, but requires relevant policy initiatives, some of which Sitharaman’s budget had incorporated.

Yet it is hard to dismiss that the feasibility of such massive transformational planning does call for some evidence-based policymaking at the various levels of governance. In this context, one thing that is expected of the finance minister is to bring trust and transparency in the numbers/estimates accounted in the budget. However, the veracity of the estimates of some crucial macroeconomic indicators presented in this budget—such as the fiscal deficit—has been a matter of contention. The fiscal deficit is a macro-number that is carefully watched by the investor community. But the finance minister’s estimates of this being at below 3.5% of the gross domestic product (GDP) for the 2018 financial year (FY) has been challenged by the Comptroller and Auditor General’s (CAG) estimates of 5.85% (due to off-budgetary borrowings by the public sector undertakings) on the one hand, while on the other, a recently published report in the Financial Express has put it at 6.1% for FY2019, based on a methodology that is similar to the CAG’s.

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Updated On : 10th Sep, 2019

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