'There have been some benefits to the corporate sector, agreed they also need support, but the government should realise that the economy is not suffering from lowering investment -- people are ready to invest but where is the demand?'
No big ideas emerge out of the Budget,’ says Professor Prabhat Ghosh from the Asian Development Research Institute, an economist who specialises in the evaluation of economic projects and large scale statistical surveys, in an interview to Rediff.com's Archana Masih.
The big takeaways from Budget 2020?
The most important task before the finance minister is to strengthen the economy to increase the growth rate.
Last year the fiscal deficit was 3.8%, this time she has pegged it at 3.5%.
The finance minister has played safe when the need of the hour is to pump up the economy.
The deficit needs to be contained, but when the economy is suffering from a demand deficit, it is the government’s responsibility to create demand through public investment -- this is what she hasn’t dared to do.
This is a strong government with 360 MPs, when they can take other bold political decisions -- why can’t they take risks of a slightly higher fiscal deficit? You do it for 1-2 years, revamp the economy and then go back to the normal deficit of 3 to 3.1%.
She has not been brave. She has acted safely.
On the new initiatives in the budget
There have been some benefits to the corporate sector, agreed they also need support, but the government should realise that the economy is not suffering from lowering investment -- people are ready to invest but where is the demand?
For small scale businesses that filed a return on an annual turnover of over Rs 1 crore -- they have raised that threshold to 5 crore.
I think this is because there has been a strong criticism that demonetisation affected the unorganised sector the most.
No big ideas emerge out of the Budget.
She mentioned aspirational, economic growth and caring India -- these are nothing new.
Other than that, there is nothing much in the Budget. Even income tax has been lowered very marginally.