By Adhirath Sethi Jan. 30, 2019
This year’s budget will be worth watching. Even if all we really care about is section 80, there is a lot there that will tell us what our government is thinking. With an election coming up, that’s more important than scrolling through your Instagram feed.
t’s approaching that time of year for the financially literate. Stop playing coy; you know what time I’m talking about. You wake up early and get your household chores out of the way. Then you put on your most hoarse possible voice and call into work, convincing your boss – while throwing well-timed coughs here and there – that you’re much too ill to come in. The excitement wells up inside you as 11 am approaches. You cuddle up in front of the television, a glass of tea in one hand and an abacus in the other. Then you switch to the right channel just in time to hear the FinMin belt out an opening salvo in a smooth baritone.
Sadly, with the exception of chartered accountants, no one really looks forward to the annual budget in this manner. This is because the budget has all the build-up of a football World Cup final but delivers the eventual entertainment of a chess game between two distracted sloths.
Despite its rather dry overall premise, the budget is an integral part of our economic calendar. It lays out the financial milestones achieved by the government, makes provisions for expenditures during the coming years and announces changes in the tax code for both businesses and individuals. For those of you still awake after that sentence, the budget also lets us know how much money we don’t need to give the government in the coming year. So it’s not all boring.
However, it is little wonder that regular individuals find it tough to get too excited about the budget. For anyone in a normal, salaried job there are only three avenues to save money. Either the basic slab before income tax applies is raised, or the amount of your home loan EMI you can claim deductions on increases, or they offer a higher limit for tax exempt investments. For this reason, we watch the budget in much the same way that young men went to the cinemas in the ’70s. They’d go in, wait for the Liril ad to come on and then leave (#TrueStory).
To think that the government might squander the money so carefully protected by the former RBI governor in this manner would be a sombre end to that saga.
It also doesn’t help that there’s no more a separate railway budget. Now while you might argue that there was nothing especially fun about the railway budget in years past, try not to forget who presented it between 2004 and 2009. Lalu Prasad’s impersonation of an able shepherd to the finances of our nation’s largest employer should have been India’s only and undisputed entry to the Oscars. And he should have won. Every year.
Although we should point out that the budget this year might look at raising the basic slab for tax exemption from 250,000 to 500,000, this alone will not give Mr Jaitley the misogyny-on-Koffee-with-Karan type ratings he so clearly yearns for. And though he isn’t going to be presenting the budget this year (interim Finance Minister Piyush Goyal is), he’s been dropping hints, of course, keeping us all twittering about what he’s going to do. And the upcoming elections make things somewhat interesting.
For starters – this should really be an interim budget but is instead looking like a full-fledged normal budget. What we mean by this is that because the current government might not be around during the next financial year, they’re not actually supposed to dictate spending policies for the full year ahead. Rather, they’re meant to give some general guidelines to tide the economy over until the elections are completed. It’s like when you know your child might be expelled, so you don’t pay the fees in full to the school until you know for sure what is going to happen.
The rationale for sidestepping these budget norms is being attributed to the “weak state of the economy”. How the government manages to simultaneously celebrate us as having the world’s fastest growing GDP and decry our lack of success in this department is a juggling act worthy of the final round of India’s Got Talent. Nonetheless, like all Indian parents who demand higher marks, the finance ministry believes that languishing at a 7-7.5 per cent growth rate is simply not good enough and that eight per cent is where we should be at.
The other interesting aspect of the budget is what the government plans to do with the ₹40,000 crore – what many are calling Urjit’s alimony – that the RBI will be giving it shortly. Worryingly, the results of recent state elections set of a “my waiver is bigger than your waiver” contest between our two major parties, so it is very plausible that this is where the money will go. So, if you are a farmer, expect it to rain (handouts, that is. Actual rain is much more elusive these days).
To think that the government might squander the money so carefully protected by the former RBI governor in this manner would be a sombre end to that saga. We have already discussed farm loan waivers as little more than a political adrenaline boost. It’s a shot in the arm that might actually see the BJP retain power in 2019, but for a government claiming commitment to economic growth, the walk wouldn’t quite match the talk.
So, when you do plan your day for February 1, try and remember that this budget might just be worth watching. Even if all we really care about is section 80, there is a lot there that will tell us what our government is thinking. With an election coming up, that’s an important thing to know.
Adhirath Sethi is a novelist based in Bangalore. He sits around waiting for beards to stop being cool, because he can’t grow one. If you see him online, don’t engage… he’s just there for the stalking.