Budget 2019 sets the pace for further economic reforms in India

Budget 2019 sets the pace for further economic reforms in India

NVR Swami

India looks forward to a US$ 5 trillion economy in five years with a sustained Gross Domestic Product (GDP) growth of 8%.

Exuding confidence in presenting her first budget as Finance Minister, Nirmala Sitharaman said that economic growth was high on the agenda of the right-wing Bharatiya Janata Party (BJP) government which returned with a massive majority in the recent Parliamentary elections.

Growing concerns

She said that the economy had reached US$ 2.7 trillion and should end up at US$ 3 trillion by the end of the current fiscal year in March next year.

Yet there was a growing concern at any fall in the steady growth.

Ms Sitharaman is the first full-time woman Finance Minister of India, although Indira Gandhi held that portfolio briefly in 1970-71 with the resignation of her predecessor, Morarji Desai (who led the Janata Party to power in 1977).

A versatile spokesperson of BJP in various roles, Ms Sitharaman was the Defence Minister (another first for a woman) in the last government before the polls were called.

Versatile and Patient

Prime Minister Narendra Modi brought in fresh changes in his new government and promptly pushed Ms Sitharaman in her new role. She moved in place of Arun Jaitley who volunteered to stand down because of weak health.

She is a good listener, open to suggestions since her days in the prestigious Jawaharlal Nehru University where she met Parakala Prabhakar and married him before both moved to London.

He joined the London school of Economics to pursue his PhD while she was for time at  Habitat, a home decor, where she won a bottle of Moet & Chandon champagne for registering high sales. Thereafter, as her profile says, she joined Price Waterhouse where she was Research Manager for audit and analyst to study East European economies adapted to western audit and marketing systems in 1980.

The couple returned to India in 1991 to start a family.

She joined the BJP in 2006 and, with ease, climbed the Party ranks.

Dislike for fiscal waste

Media reports suggest she has a dislike for fiscal waste and inefficiency which was amply reflected to modernise the armed forces in her tenure as Defence Minister.

And she will continue with her budgetary discipline coming as it does in the backdrop of systematic risks and headwinds across local and global spheres.

She is aware of big ideas to kick-start growth.

With sights set on high economic growth various reforms were spelt out to improve the GDP growth. Key reforms include expansion of cash transfer scheme to all farmers, a drastic cut in unemployment, a housing boost for middle class families, incentives for start-ups and measures to improve infrastructure.

She has to find resources for a hefty bill, running into billions of dollars, to support the lot of farmers.

As Mr Modi said, the Budget “has a road map to transform”  the agriculture sector of India.

When some of us journalists who covered mind boggling figures of the finance ministry still remember the excitement all over the Parliament buildings and the stories on the printing of budget papers.

As the story goes, these papers were printed at the Rashtrapati Bhavan, (the Indian Presidential Palace) for the first few years of Indian independence in 1947.

After a Rashtrapati Bhavan staffer leaked budgetary information, the printing was promptly shifted to the basement of the North Block, housing the Finance Ministry.

Those working were reportedly “locked up” in the Ministry and allowed to get back to their families after the presentation of the budget.

I left India about four decades ago. I am not sure if the practice still continues.

NVR Swami is a veteran journalist who has covered a host of events around the world. He lives in Auckland.

Our Staff Reporter adds:

The practice of printing the Union Budget in the lockdown of the Finance Ministry continues to this day. The printing of the Budget begins with the traditional ‘Halwa Ceremony’ and even the Finance Minister is not allowed to carry any electronic instrument including a mobile phone into the facility until the Budget is presented by her to Parliament.

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