IOS organises Panel Discussion on Union Budget-2024

IOS organises Panel Discussion on Union Budget-2024

A panel discussion on “Union Budget-2024” was organised by the Institute of Objective Studies on August 1, 2024 at its auditorium at New Delhi.

The discussion began with the recitation of a verse from the Holy Qur’an by Mr. Shamshad Ahmed with its Urdu translation.

The first panelist was Prof. Amitabh Kundu, professor emeritus, L.J. University, Ahmedabad. It may be recalled that he was the chairperson of the post-Sachar Evaluation Committee, set up by the Ministry of Minority Affairs, Government of India. In his presentation, Prof. Kundu, held that some points came to his mind to understand whether efforts were made to reduce regional disparities in the budget. If steps had been taken to give some sops to backward states? Since the Planning Commission had been dissolved, states could not forcefully plead their case at other forums. But the current budget allocated more funds to Bihar and Andhra Pradesh. He questioned if the states which had been given special facilities deserved that. He also quoted the leaders of India Alliance terming the budget as “Kursi Bachao Budget” (Save the chair budget). He said that it was not correct to state that the two states received large amounts as special assistance. Bihar had been allocated a big amount for the construction of roads, bridges and new buildings for IIT and hospitals. Meaning thereby funds for the development of infrastructure. In fact, Andhra Pradesh deserved the financial assistance for the development of its capital, Amravati. Funds for Andhra Pradesh would be arranged through the multinational companies. He held that the central government would have its say in the funds allocated to Bihar. It would have been better if the state also had its say in the utilisation of the assistance. It was difficult to say whether the special central assistance given to Bihar and Andhra Pradesh would have any impact on other states, he noted.

Referring to the allocation of budget to the Ministry of Minority Affairs, he said that according to the Union finance minister, Ms. Nirmala Sitharaman, this year’s budget provided Rs. 500 crore additional to the Ministry compared to last year’s budget. It would have to be examined what had been done to benefit the minorities. He referred to the ex-prime minister, Dr. Manmohan’s announcement on the floor of the House that Andhra Pradesh would be given special financial assistance. He said that the allocation to the Ministry of Minority Affairs stood at Rs. 3097 crore for the financial year 2023-2024 while it accounted for Rs. 3,183 crore for the current financial year. Regarding Muslim children in the age group 6-14 years attending school, he observed that while Muslims accounted for 88.9 percent, 99 percent children of upper castes were going to school. Thus no big difference between the two attending school was noticeable. As far as the students of the age of 16 years and above going to higher secondary school is concerned, while the percentage of upper caste Hindus stood at 40 percent as against 15 percent of the Muslims. Similarly, in terms of technical education, upper castes stood at 21 percent as against the Muslims at 12 percent. Highlighting main features of the current year’s budget, he said that under the internship scheme announced in the budget, 4.1 crore youth would be provided employment, skill-training and other opportunities over a 5-year period with an outlay of Rs. 2 lakh crore. This internship would be made available to them through big companies.

Prof. Kundu expressed doubt about the implementation of the internship scheme, and he had his own reasons for it. According to him, IITians covered under the scheme will not get job. Since there was caste bias in the companies, it cast doubt on the implementation of the scheme. It was difficult to reach out to the weaker sections. He urged the government to look at these aspects.

The second panelist was Prof. Arun Kumar, Malcolm Adiseshiah Chair Professor, Institute of Social Sciences, New Delhi. He spoke on Union Budget 2024-25 for the few: A sub-optional Macro strategy, and Micro strategy. He said that it was a coalition government and thus the corporate sector was worried. But Bihar and Andhra Pradesh benefited from the budget. This worry stemmed from the fact that taxes were paid by the corporate sector. Comparing the current budget with the last year’s, he said that the increase this year in total was only 7 percent, from Rs. 47.66 lakh crore to Rs. 48.20 lakh crore. Thus there was no big increase in the size of the budget. Announcement to achieve 5-year expenditure target was to make it look like big. Commenting on the internship scheme under which 500 companies would provide internship to 1 crore youth over a period of 5 years, he said that the allocated amount of Rs. 10,000 crore had not yet been spent. He noted that this was nothing extraordinary. In 2023-24, it was increased to Rs. 324,641 crore, but the expenditure was Rs. 273,985 crore. He described the special assistance given to Andhra Pradesh and Bihar as a gimmick. Expenditure to key heads were increased to cover inflation. Giving an example of agriculture and allied activities, he remarked the funds were allocated but not spent. There was no funding for the schemes for marginalized sections in real terms. He held that the country was said to be on the path of fiscal consolidation. But it was pure deficit financing. F.D. expected to be at 5.9 percent of GDP in 2023-24 had been brought down to 5.6 percent. This might benefit the middle class which was out of the ambit of Income Tax, he said.

Prof. Arun Kumar pointed out that 1.5 crore were the effective tax payers. About 2 crore people belonging to the middle class were paying income tax. While 5 percent were paying direct taxes, 25 percent were indirect tax payers. There was net decrease of taxes worth about Rs. 7000 crore which worked out to 0.18 percent. He observed that the international financial institutions limited the size of the government’s budget. They wanted to limit the role of the government, so that the private sector could expand. It dented the ruling party’s claim of making the country “Atma Nirbhar” (Self-reliance) or “Vishwa Guru” (World Teacher). There was 80 billion dollars deficit in China. There was also the admission of the weakness of Indian economy and an overwhelming dependence on Chinese imports. He noted that the demand for labour was shifting from unorganized to organised sector. He made out a case for making India a part of the Chinese supply chain and dent “Atma Nirbharta”. While the organised sector was increasing, the unorganized sector was declining. Unemployment and crisis in the agriculture was a matter of concern. Fiscal deficit was dictated by international financial institutions, he concluded.

The third panelist was Prof. Asheref Illiyan, head of the department of economics, Jamia Millia Islamia, New Delhi, who focused on agriculture and allied sectors. He said that several measures had been announced for the development of agriculture and the allied sector. Growth in agriculture came down by 4.5 percent. In 2024-25, the Ministry of Agriculture had been allocated Rs. 1,32,470 crore which was 2.7 percent of the total budgeted expenditure. This was estimated to be 5 percent higher as compared to the revised estimate of 2023-24 of Rs. 1,26,666 crore. He noted that the allocation for the ministry of fisheries was declining in real terms. PM’s Fasal Yojana too registered a decline by 2.7 percent. Thirty percent farmers were covered by the crop insurance scheme. He cited the example of the South Korean government which paid the premium of the insurance. No allocation for research and development in the sector had been, he added.

Chairman of the IOS, Prof. M. Afzal Wani said that every programme of the government should be part of human being. Just treatment should be given to people and remedies of every sort be made available to them. He explained the difference between Indian and British justice system. He pleaded that the justice system be made available to everybody.

In his presidential speech, former head of the department of Economics, Jamia Millia Islamia, Prof. Naushad Ali Azad, explained that budget was an exercise by the government to take money and give it back to various sectors. Budget was the source of money coming and going. He said that this budget was influenced by elections and the government was forced to present the budget. He held that unemployment was a core issue and it had been given some space. Special financial aid given to Bihar was impacted by election results. He observed that every government presented its budget according to its priorities. Indian economy was characterised by so many things. Unemployment and employment were two different issues. Future of work was discussed at the meeting called by the Ministry of Finance before the budget. He said that jobs were shrinking due to the advancement of technology. Thus the nature of work had to be defined. Situation had come to such a pass that even the technocrats did not wanted to work in the corporate sector. They wanted to work as freelancers. The good thing is that India is a big market of technology. It offered demographic dividends and was a partner of global value change. India’s growth rate was consistently high in the past one or two decades. He concluded saying “No country in the world is like India.”

The Panel Discussion ended with a vote of thanks extended by the Vice-Chairperson of the Institute, Prof. (Ms.) Haseena Hashia. A fairly good number of economic experts, teachers and university students attended the panel discussion.