The Telegraph puts five questions to students of the country’s top business schools
(a)How do you rate the budget on a feel-good scale of 1-10?
(b)What is the budget’s big idea?
(c)Where has the FM scored?
(d)Where has he failed?
(e)If you were the FM, what would you have done to improve the government’s image?
(Clockwise from top left) Shreye Mirani, Prashant Sarkar, Deepika Saluja, Prashant Yadav
b) Impetus to growth and intent to reduce inequalities.The proposed infrastructure outlay is extremely critical.Encouraging foreign investment is important and so is promoting human capital through increased outlays in education, food security and women’s welfare
c) Walking the tightrope between fiscal deficit and crippling economic growth. It is a balanced budget which has abstained from offering new sops to any particular sector and tried to reduce the burgeoning fiscal deficit. A deduction of Rs 1 lakh on interest payment for a loan of up to Rs 25 lakh for a first home has added grace
d) The FM proposes increased spending. But he has chosen to contain fiscal deficit by increasing disinvestments, which wasn’t successful last year. Bold cuts in expenditure would have sent a more credible signal. A serious intention to roll out GST has been expressed but no specific timeline for its implementation has been set. No relief to the middle class. A tax credit of Rs 2,000 for those in Rs 2-5 lakh slab is not adequate
e) Tackle fiscal deficit head on. This would improve foreign investor sentiment and promote greater domestic investment, leading to improved growth in the medium term. It will also help control inflation, which in turn would prompt the RBI to cut rates. If the fiscal house is in order, it would not just improve the government’s image among investors but also build a foundation for long-term growth.
|(Clockwise from top left) Adeeba Ansari,
Dhruv Shah, Souvik Mukherjee, Kunal Ashok
b) Consolidation. Stating the need for stimulating growth. Higher than anticipated spending in key sectors like
infrastructure, rural development, defence and banking
c) It could have been a populist budget given that the elections are due next year but the FM has resisted that temptation. He has kept the deficit numbers in line with what was promised. Outlays for next year have been
increased and since no major taxes have been levied, it seems the government will bank on one-time exercises like disinvestments and spectrum auctions to meet
additional revenue targets. The inflation-linked bonds are interesting. The FM wants the middle class to invest in
diverse asset classes rather than just hoard gold. Allowing insurance and pension firms to trade in bonds might mean India’s debt markets are finally coming of age. A women’s safety fund, too, is a step in the right direction
d) No clarity on implementation of DTC and GST. Token measures like taxing the super-rich and large corporations will not help reduce deficit significantly. From a youth perspective, no specific allocations in higher education (except upgrading Nalanda University) is a setback. No specific measures to rein in inflation, so it will again be left to the RBI’s policy directives
e) Provide clarity on DTC and GST and try to tame inflation (particularly in food) by removing supply-side bottlenecks.
|(Clockwise from top left) Akshay Mahajan, Hari Rao
Vijayendran, Sailesh Ganesh, Rahul Kumar Jha
b) Rationalising expenditure and allocating more towards planned activities such as infrastructure, skill development and food security. This will create assets. The expenses will be compensated by taxing the super-rich. The budget also recognises the need for more foreign investment to reduce the current account deficit
c) Specific allocation for women’s security in the light of recent happenings, schemes to develop industrial skills of youth and effort to reduce spending. The idea of inflation-indexed bonds and additional exemption to home loans will not only help consumers but propel demand
d) Increasing taxes via surcharge for domestic companies and individuals to make up for tax breaks elsewhere is a bad idea. The tax base, and not the tax rate, must increase. The withholding tax of 20 per cent on profit distribution will hurt the small investor. The amnesty on service tax defaulters from 2007 will encourage erratic behaviour in the future. The budget lacks in major structural reforms and has mainly been made keeping in mind the 2014 polls. Primary education, which is in a dismal state, has been neglected yet again
e) Implement the much promised Aadhaar and prioritise primary education along with infrastructure, energy and manufacturing. Tackle food inflation and reduce regulatory requirements to create an investor-friendly environment.
|(Clockwise from top left) Gourav Sachdeva,
Anchal Khaneja, N. Krishna Chaitanya, Kritika Nema
b) No real big idea but if one has to list the highlights it would be: the intent to bring fiscal deficit, which stands at 5.2% of the GDP, under control; the thrust on equal development in rural and urban areas; the Rs 1,000 crore for Nirbhaya Fund; women’s PSU banks; and the disincentive for gold imports
c) It is a popular opinion that an Indian budget can either be reformist or populist but not both. Chidambaram has tried to strike a fine balance. The aim to curtail fiscal deficit to 4.9% of the GDP. Effort to send out growth signals to the country. The tax on the super-rich. The emphasis on skill development for the youth. And the declaration of the Lakhipur-Bhanga stretch of river Barak in Assam as the sixth national waterway offers potential
d) This budget offers no relief for the middle-income group. It also fails to address grassroots issues such as the problems in agriculture or the retrospective tax such as the one on Vodafone. Intent is fine but implementation, about which the minister is silent, is equally crucial
e) Ensure focus on proper implementation of the plans and remove bottlenecks in the delivery system. Offer a strict timeline for rollout of the GST. Also, announce a road map for phasing out subsidies and other populist schemes.
(Reports by Basant Rawat, Rakesh Kombra, Chandreyee Chatterjee and Andrew W. Lyngdoh)