A DECADE OF MODINOMICS: A REVIEW (Part 2)

In the previous part, I wrote on the situation of the four ‘castes’ formulated by the Prime Minister. In this part, I wish to share my views on the Interim Budget 2024-25.

Boastful Interim Budget

On 1^st February 2024, the Finance Minister presented the Interim Budget for 2024-25. The Budget Speech was used as a platform to repeat the boastful claims which were already articulated in the President’s Address to Parliament and the Economic Survey.

Youth & Unemployment

The Finance Minister used the word ‘Youth’ in her speech but did not speak about unemployment.

According to the State of Working India Report (of Azim Premji University), the unemployment rate in youth between the age of 15-29 is 10%. Among graduates, the unemployment is 9.8% (between the age of 30-34) and among graduates under the age of 25, the unemployment rate is 42%.

The Finance Minister did not acknowledge this problem nor did she spell out any policy action to address the problem. In ten year of being in office, the Modi Government has failed in ensuring that the economy benefits from the demographic dividend.

Farmers

The Finance Minister was vocal about farmers. But what missed in the Budget was that as per NCRB Report, there were 11,290 farmer suicides in 2022.

The Finance Minister also claimed that every year, under PM-KISAN SAMMAN Yojana, direct financial assistance is provided to 11.8 crore farmers, including marginal and small farmers. But as per the data released by the Ministry of Agriculure, the number of PM-KISAN beneficiaries dropped to 8.12 crore farmers as on November 15, 2023.

The Finance Minister said that the provision of basic necessities have enhanced real income in the rural areas. But the fact is that as per the State of Working India report (of Azim Premji University) the rural incomes between 2017-18 and 2022-23 have stagnated.

Budget Allocations

The allocation in the Interim Budget (as a percentage of total expenditure) for Health was 1.8% and 2.5% for Education. No target set by the Finance Minister in these fields can be meaningfully achieved in such low levels of expenditure on these important sectors.

Fastest Growing Economy

The Finance Minister said that we are the fastest growing economy. Is it some sort of a badge of honour? The real parameter which the Government must talk about is per capita income.

The Finance Minister estimated the GDP to grow at 7%. The Budget documents show that per capita income is estimated to grow between 2-3%. If GDP is growing at 7%, why is it not getting reflected proportionately in per capita income?

Since this is an Interim Budget, I do not wish to explore more on the allocations and announcements as the full Budget in come in July. In the next part, I will write about the White Paper presented by the Government in the Parliament.

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