(This is not an analysis of the Budget- These are random thoughts about the Fudget. Why is it in this form? It is nothing that a budget in a corporate board room would be about. As I was listening to the talk yesterday, scribbled some views…)

Fudge. Budget. Fudget. That is what all government budgets are. Bureaucracy is clever enough to make sure that the number-work is good and there is now enough things that are pushed outside the budget, to hide problems. We do not even bother about accounting propriety. Revenue and capital is all mixed up. We sell family jewels to meet living expenses.  We sell the assets that belong to future generations, to fund some grandiose scheme.

 

I have stopped reading budget documents. Today, I heard most of the budget speech. The first part took so long that it stuck me that by the time the second part comes, most of us just want it be done and over with. The first part was an enumeration of schemes and plots that the government has done in the past. Strictly, I do not want all these in the budget. A budget is an estimate of receipts and payments. It should not be a narration of past achievements. You can put it as an annexure to the budget document and focus on how you will raise money, where you will spend, why you will spend etc.  And then come down to brass tacks. How much are you short by and how will you meet. And do you have a plan B? What will happen when there is a revenue shortfall? And do you want to give us a quarterly break down of broad numbers and then give us a report about where we stand.

Today, there were a few things that stood out:

  1. The first budget is the ONLY one where big changes in policies can be made. Missed the bus by making this a pure plus/minus game;
  2. The attempt to curb corruption of the Income Tax officials is welcome. Personally, I would have also added severe punishment (confiscation of all property etc plus a minimum jail term of 25 years or so) for those accepting and giving bribes;
  3. There is no intent to let go of the PSU Banks. In fact another 70,000 crores is being thrown away;
  4. Worried when there is mention of reincarnation of Term Lending Institutions;
  5. Amused to hear the intent to set up an Aircraft financing business;
  6. NHB being stripped of regulatory powers over HFCs is very good;
  7. RBI being given additional responsibility is scary- They have failed in every role given to them thus far;
  8. Why this sudden love for NBFCs? Another scam in the making?
  9. Why this pathetic increasing surcharge on the uber rich?
  10. Nothing for the middle class;
  11. Another cess on petrol. Will there be a separate accounting for that?
  12. Good moves on affordable housing;
  13. The government seems to be moving towards extreme left, with room for a limited number of friends;
  14. Gold smuggling will increase ;
  15. Single brand retail – Welcome liberalization. Might as well make it multi brand;
  16. Angel tax is not eliminated- Just one more level approval needed;
  17. Aadhaar is here to stay. Ego and compulsion win over common sense and fairness;
  18. Farmer can forget doubling of income. Only way it will happen in the time frame as promised is by folding the currency note in to two;
  19. Borrowing in foreign currency is never a good idea, unless you can raise perpetual debt;
  20. Debt servicing takes away so much of our revenues;
  21. We are talking about elections for Centre and State together. It is time to think of a budget for Centre and States consolidated;
  22. Some discussion on revenue share with states and centre;
  23. Government expenditure needs a discussion. Why? Why so much? Why it never reduces?
  24. Government manpower plans needs to be seen. How will we reduce wasteful headcount?
  25. A note on pension liability for the future that is being built up;
  26. The push to Electric Vehicles is good. Also make it time bound. A calibration based on time- For example, a zero GST in year one and two and then increasing gradually. Give the early movers the most;
  27. APMC is still hanging in there. No action to help the farmer from farm to shelf. That is where the room to improve farmer income lies.;
  28. No government ever addresses incentives for farmer to increase farm productivity;
  29. We are not able to see an actual vs budget. Like companies give audited accounts, government should present it within three months of year end- Line by line ;
  30. We are moving towards protectionism. The whole world is being pushed and what it means is that each nation is shrinking its GDP;
  31. Once again talks of export incentives. Give incentives only for increase beyond actual achievements of last year;
  32. Why should budget mention rubbish like introduction of new coins etc?
  33. Why should the Finance Minister be constantly praising the Prime Minister?
  34. Was the budget finalized in the PMO?
  35. Plugging the tax loophole on the buyback of shares was good.
  36. Why does the budget document have to mention changes in regulation for HFC etc? These are things that do not have to wait for the budget. SEBI, RBI etc should not be part of an annual budget.

I am sure a lot of us have different thoughts. Till the path breaking VP Singh budget under Rajiv Gandhi, the only thing we wondered was the quantum of hike in excise or customs duties and tax rates. Now, the focus has shifted to silly things in capital markets. Why should it matter if public holding is 25% or 35%? If the market thinks that increased free float will crash the market, it is very amusing.

In terms of quality of ideas, this budget is very poor. And seeking to increase taxes on the Uber rich is not a great thing to do. Clearly smacks of the policies of Indira Gandhi.

The PM has made a grand statement about our economy becoming a five trillion dollar one in some time. Big deal. Simple arithmetic. As my friend commented,  the politician wants to take credit even for compound arithmetic. And this BS line became the theme song of this budget. It tells me that there is no thought to pull this economy out of its slumber. Jobless growth?

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