If in five years this is doubled, it would mean they would earn Rs 40,000 or so, which amounts to Rs 3,500 a month, and not even that if inflation is factored in. Mudra loans may have helped some entrepreneurs, but the average loan offtake under this scheme is around Rs 50,000 per beneficiary, hardly sufficient to start or sustain a new business. Swaminathan report, which calculates ØºÙŠØ± Ù…Ø¬Ø§Ø² Ù…ÙŠ Ø¨Ø§Ø´Ø¯ts to include not only what is spent on fertilisers, seeds, machinery and irrigation, but also labour, land, rents and interest high speed injection molding machine Factory on capital investment? If the criteria to compute ØºÙŠØ± Ù…Ø¬Ø§Ø² Ù…ÙŠ Ø¨Ø§Ø´Ø¯ts is arbitrarily changed then the delivery will neither match the promise made in 2014 nor the expectation and needs of farmers. Bihar has been asking, on very reasoned grounds, the granting of special category status. Has the Budget created the incentives for a substantial growth in economic productivity that could translate into a quantum increase in jobs? While we have improved our standing in the World Bank Ease of Doing Business report, we are still — as the report itself says — unacceptably lagging behind in key sectors. In the last years of Mughal rule there used to be a popular saying: yak anaar, sad bimaar (one pomegranate, a hundred ill people)! There are so many competing constituencies, that it is near impossible, given that resources are not elastic, to please them all. But although the goal sounds impressive, in reality it means very little unless much more is done. The government claims — on the basis of a controversial recent report by two economists — that it has created seven million jobs in the formal sector of the economy. Currently, our healthcare system is short of doctors by 72 per cent; we have only 50 per cent of the nurses we need and laboratory technicians are 80 per cent less than required. I don’t believe that this has been assured unless the calculation of MSP is transparently clarified.
Are we then in a position of overemployment?Fifth, it was the expectation of many least developed states, that the Budget would have special measures for their development. It is true that there has been a marginal increase in MSP last year, but this was accompanied by what appear to be some very curious and irrational economic decisions.And finally, the ambitious health coverage scheme up to Rs 5 lakhs each to 50 crore people, is an audacious one, but where is the money for its implementation going to come from? The Budget certainly does not indicate this. For instance, with enhanced MSP, the production of pulses grew substantially. How can they be expected to take more credit when so many of them are committing suicide because they cannot repay what they have already borrowed? Besides, most farmers are at the subsistence level. For instance, we are at 156 out of 190 countries in the vital area of starting a business, and at 181 in registering a property. Given rampant agrarian distress, this is a laudable objective.
Moreover, according to most economists, one job created in the formal sector leads to two in the informal sector.A fourth question relates to jobs. According to the National Sample Survey, average annual income of median farmers, net of production ØºÙŠØ± Ù…Ø¬Ø§Ø² Ù…ÙŠ Ø¨Ø§Ø´Ø¯ts, is currently around Rs 20,000. But just when the farmer was in a position to earn from what he produced, the government decided to import pulses in large amounts, leading to a crash in market prices. The essential point is that after two successive years of drought, and with farmers committing suicide in record numbers, farmers need to be guaranteed with security of income. First, the government has claimed that this Budget has especially kept in mind ameliorative measures for the farmers.Third, the FM repeated in his Budget speech the goal, articulated earlier, that farmers’ income would be doubled by 2022. But to what extent will this intent have the desired impact is debatable.But the key question here is how will the government compute ØºÙŠØ± Ù…Ø¬Ø§Ø² Ù…ÙŠ Ø¨Ø§Ø´Ø¯ts? Will ØºÙŠØ± Ù…Ø¬Ø§Ø² Ù…ÙŠ Ø¨Ø§Ø´Ø¯ts be computed on the basis of the M. This hardly appears to be realistic. Now, three years later, the FM has said that the government will give 50 per cent over input ØºÙŠØ± Ù…Ø¬Ø§Ø² Ù…ÙŠ Ø¨Ø§Ø´Ø¯ts to farmers. In the best of circumstances, the job of the FM is not easy.Second, one of the Budget’s key instrumentalities to help farmers is to increase the credit available to them. The allocation to public health has gone up only marginally, and in fact, as a percentage of the Budget is less than that of last year. Again, in normal circumstances, this would be a positive move. We wish the FM well, but for this he may actually need a magic wand!
It is a moot point whether they even have the requisite legal collateral to avail of such loans. In February 2015, this government had given an affidavit to the Supreme Court that, in spite of the BJP’s specific poll promise in 2014, it would not be possible to increase the minimum support price (MSP) to 50 per cent over input ØºÙŠØ± Ù…Ø¬Ø§Ø² Ù…ÙŠ Ø¨Ø§Ø´Ø¯ts for farmers, as this would distort the market. Apart from the cash component, there will also be huge infrastructure ØºÙŠØ± Ù…Ø¬Ø§Ø² Ù…ÙŠ Ø¨Ø§Ø´Ø¯ts. The FM deserves to be congratulated for making the heroic effort to please most constituencies, and if he has, as some critics believe, fallen flat between several stools in doing so, he must at least be given the credit for having tried. However, in current circumstances, half of all farmers are already under a per capita debt of Rs 47,000.S.Finance minister Arun Jaitley has presented this government’s last substantial Budget before the next general elections in 2019.The Budget does, however, raise some important queries, which, although I am not an economist, I would be happy to receive a clarification on. And what impact increased lending in this form will have on banks already overburdened by NPAs, is another matter. But such expectations were left unfulfilled. Have we then created 21 million jobs? On an average, there are 12 to 15 million young people in the job market