After the record breaking 160 minutes of the union budget speech, if you are left confused and clueless then you are not alone. Former prime minister and noted economist Dr. Manmohan Singh when asked for his opinion on the budget said it was “too long to absorb”.
However former finance minister P.Chidambram didn’t shy away from showing his disappointment with the budget and had a lot of critique saying “the government is in complete denial that the economy faces a grave macro-economic challenge and the growth rate has declined in six successive quarters. There is nothing in the budget that leads us to believe that growth will revive in 2020-2021. The claim of 6 to 6.5 per cent growth next year is astonishing and even irresponsible.” Seeing as the food subsidy had been reduced, he remarks that the budget had failed in overcoming the food inflation which was over 10 per cent. Apart from that, fertilizer subsidy had also been reduced and the petroleum subsidy had been marginally increased. “It appears that the people will not get any relief on the price front,” he said.
Concluding his opening speech he said “You did not ask for such a budget, and you did not deserve such a budget for voting the BJP to power. But you have to live with it until the government is forced to revive it as it did in 2019.”
Moving over to the equity market, NIFTY saw its worst budget returns in at least a decade. Reacting negatively to the budget, the equity markets closed over 2.5 per cent down.
The budget also faced a lot of criticism from the opposition parties. B.Mahtab a member of Biju Janata Dal said, “More corrective measures are necessary, the banks were not in a position to lend for infrastructure and the government should not lose sight of wider reforms in the public sector. There is a need to bring competition in the banking sector.”
Jairam Ramesh joined his party in criticizing the budget, he said,” the most important reason for GDP growth declining is the decline in investment growth. Economy growth comes from investment and investment comes from savings. The most serious problem in India that is not recognized in the budget is the falling savings. I would urge the finance minister to pay attention to the fall in the household savings.” Further adding he said, ”the government should switch from cash based accounting for the sake of more transparency in its financial statement.
Of all the impact created by the budget 2020, LIC would describe its impact on them as downright disastrous. In the annual budget, the government of India has decided to sell parts of its holding in Life Insurance Corporation of India (LIC). Calling for the strike to oppose this decision, General Secretary of All India Insurance Employees Association, Shreekant Mishra said, “Union finance minister today announced while presenting the budget that LIC would be listed in the stock exchange and the government would sell parts of its stake via a public offering. As decided in the 25th general conference of AIIEA, we request our units in LIC to go for an hour walkout strike preceding lunch recession 4th February as an immediate protest action. Almost all of them have responded positively and have assured to come back to us by the evening.”
Trinamool congress MP, Dola Sen called out the government for their unwise decision to sell profit making central government entities for short term gains.
Regarding the centre’s decision on LIC, P. Chidambaram said that if the centre fails to convince them with a rational explanation for their move, congress may oppose the proposal. The annual budget has come at a very crucial time that can have major impacts at the Indian economy. With a mixed reaction at the overall budget, it is however evident that the impact was not a major one. A lot was expected from the budget, which the government failed to deliver.
The views and opinions expressed by the writer are personal and do not necessarily reflect the official position of VOM.
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