What is your initial reaction on the budget?
It is like a full budget plus a 10-year plan. Mr Modi is saying this is an election thing, please elect me for 10 more years! The highlight of the budget is the farm support programme at Rs 75,000 crore. It is not an exceptionally high figure, but it is over and above all the state schemes, over and above all the existing subsidies. It would reach 10 crore families of the 23 crore overall.
So, it is not clear whether this is going to reach the tenants and the sharecroppers. If it only reaches the farm owners, it will be more like the Telangana model and will be inferior to the Odisha model.
On top of that, the big surprise is the fantastic amount of tax breaks for the urban middle class especially through income tax. The figures do not add up. If you are going to spend so much more on the farm sector and give up so much income tax, the idea that you can maintain the fiscal deficit at 3.4% would mean extremely detailed calculations.
This is only possible with a certain amount of smoke and mirrors of having a certain amount of supposed divestment, all of which are funding the deficit and not bringing the deficit down. To that extent, it would be negative.
He said nothing whatsoever about reducing corporate tax down to 25%. One of the major things that one had expected would finally happen and take that reduction to its logical conclusion, because frankly they do not want to be seen as helping the rich in an election year.
This is an election budget pure and simple. It is aimed at gaining votes and perhaps it will gain votes but the mathematics of it needs to be subject to extreme scrutiny, to me it does not add up.
What about the middle class push to the budget, the income cuts that have been given and all of that?
It is huge. I mean had he just increased the exemption limit from Rs 2.5 lakh to Rs 3 lakh that itself would have been a substantial amount; to double it to Rs 5 lakh is enormous. A huge amount of your tax comes at that particular bottom level. So, they are giving up a very large sum of money. This is why I say, I do not think the figures add up. There was some talk about the middle class breaks may cost Rs 18,000 crore. It would become much larger than that. I do not find that particular sum credible.