'The economy has to become the government's No. 1 priority, which it is not at the moment,' says T N Ninan.
Illustration: Dominic Xavier/Rediff.com
Come Budget time and it is surprising how much of the discussion is on tax rates and revenues -- though these account for only 60 per cent of the Union Budget, up from about 52 per cent of the Manmohan Singh government's last Budget.
Non-tax revenues, including borrowings to fund the deficit, account for the remaining 40 per cent, or close to Rs 11 trillion, but there is little focus on how to boost non-tax revenues or reduce the level of borrowings by saving on expenditure.
This is surprising, given how it is non-tax revenues that have fallen short even as tax revenues have grown faster than the gross domestic product.
If tax revenues have done well, thank the oil windfall of 2014-2016.
Arun Jaitley used the opportunity afforded by the sharp drop in oil prices to soak up tax revenue, though some of it has had to be given back to the consumer.
There is also work to be done on individual taxation as well as on the goods and services tax.
But while the airwaves are full of noise on these issues, not nearly enough attention gets paid to non-tax revenues -- where there are repeated shortfalls in divestment receipts and mismanagement of revenues from sectors like telecom.
A government hungry for revenue has simply fallen back on the companies it owns, asking them to up their dividend payments or borrow on its behalf.
North Block's long arm also reached Mumbai to extract surpluses from the Reserve Bank of India.
The flip side of this is the story of where the money goes.
Trillions of rupees have been used to shore up the balance sheets of government banks, while more trillions invested in highways and railways have not yielded the returns they should have.
More highways could have been monetised through maintenance and operations contracts that yield the government net revenue.
The railways in turn is into the final phase of building high-speed, high-capacity freight corridors, but it is not yet certain what kind of traffic such lines will attract, given that the existing rail traffic is only partially containerised and new growth centres along the corridors are not yet up and running.
Meanwhile, another Rs 20,000 crore is being used this year to keep the postal department going, mostly because the pay and pension bill is much bigger than the revenue.
This spares the blushes of perennial loss-makers like Air India and Bharat Sanchar Nigam Ltd, though their losses too run into thousands of crores.
Talk of converting the postal network into a bank has remained just that: Talk.
If the government were to demand performance from the companies and ministries concerned, the non-tax component of the Budget would get a booster shot, and there would be less infructuous outlay to support non-performing companies.
The irony is that the government thinks it has all the money in the world to give these companies, when the truth is that it is more strapped for cash now than at any other time in the last decade.
Can the management of food stocks be made more efficient?
Can shortfalls in payment to electricity generators get a prior claim on states's share of central taxes?
Can private shipyards be given business to see if they can deliver within cost and stipulated timelines, because today the public shipyards don't do either?
Can politics be taken out of pricing decisions so that the subsidy bill gets curtailed?
In short, there are many ways to make the government's money go further -- if the government were to bring to the task the same determination it has shown in persisting with the amended citizenship law.
The key question is how much political capital the government is willing to spend on economic reform measures that will be unpopular with one or other section of the population.
If Air India is not sold, will it be shut down? After all, private airlines have been shut, so why not Air India?
To take such decisions, the economy has to become the government's No. 1 priority, which it self-evidently is not at the moment.