An interim Budget doesn’t typically get the kind of attention a full Budget draws. It is simply a brief of the working numbers of the state and a handover of the accounts to the next government. But this time, even the interim Budget could have been different to explain the government’s official stance on two issues — concerns over the emerging fiscal situation; second, apprehensions on misrepresented official data on employment situation.
The 3.4 percent estimated deficit figure generated a fair amount of discussion on the fiscal deficit numbers stated by Finance Minister Piyush Goyal and India’s fiscal situation. A 3.4 percent projected fiscal deficit in FY20 would mean India is giving a total miss to the Fiscal Responsibility and Budget Management (FRBM) Act 2003, contrary to what the government claims to achieve.
Already three consecutive years have gone by when the fiscal deficit targets have been conveniently tweaked upwards on account of poor revenue generation and public expenditure pressure. This Budget also wasn’t different from fiscal deviation and left questions (yet again) on the increasingly losing relevance of the FRBM Act itself as this writer highlighted earlier in a Firstpost column.
A critical piece by part-time Economic Advisory Council to the Prime Minister (PMEAC) member and National Institute of Public Finance and Policy director Ratin Roy on the fiscal situation also showed a mirror to the economy. So, one big takeaway from this interim Budget is that it confirms the notion that FRBM is only an Act on paper, no one cares any longer.
Second, what was even more interesting in the Piyush Goyal's Budget was the absence of any major mention/assessment/future road map about the job situation in the country.
This was critical because there is great amount of uncertainty about the employment/unemployment scenario at present and Budget was a good opportunity for the government to clear the picture.
Right now, there are two major problems in the job scene that is a cause of worry. One, the allegations that government is delaying/hiding official data to mask unemployment. Second, the failure of the government to generate jobs as promised in the 2014 poll manifesto, instead facing a situation where even the existing jobs are vanishing on account of lack of fresh private investments, demonetisation and failure to attract large companies to set up shops in India.
The recent Business Standard report on leaked National Sample Survey Office (NSSO) data showed unemployment at over four-decade high. According to the agency, half of India’s working age population is not in labour force.
The involvement of NITI Aayog in NSSO data presentation raised eyebrows too. A range of data releases including labour bureau survey numbers, Centre for Monitoring Indian Economy (CMIE) numbers and ground level indicators also have been pointing out major problems in job generation in the economy.
By all means, the issue warranted not just a mention but a detailed discussion in the Budget discussion. This was absent. Till this moment, the Narendra Modi government has refused to admit the existence of a serious job problem. Even during his Budget speech, Goyal tried to play down the unemployment problem by yet again relying on the much disputed Employees' Provident Fund Organisation (EPFO) data.
“High growth and formalistation of the economy led to the expansion of employment opportunities as shown in EPFO membership, which has increased by nearly 2 crore in two years reflecting formalisation of the economy and job creations,” Goyal said.
Looking at the EPFO data as an employment indicator is a bad idea as pointed out by a number of economists. Acknowledging the problem is the very first step to solve it. But with general elections are nearing, it is a bit too much to expect any government to confess and introspect the poorly performing areas. But, having said, the Budget was a good opportunity for government to clear some of the apprehensions concerning data on jobs and growth.
This government will be exiting office leaving big questions on data credibility, be it job creation or GDP growth figures. So far, it has failed to put to rest the concerns on data misrepresentation or cherry-picking of numbers to suit a particular theme. That is worrying.
Firstpost is now on WhatsApp. For the latest analysis, commentary and news updates, sign up for our WhatsApp services. Just go to Firstpost.com/Whatsapp and hit the Subscribe button.
Updated Date: Feb 06, 2019 15:23:43 IST