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  • grieving.

  • Welcome back to analysis of the budget.

  • We were looking for big ideas.

  • So what will be discussing tonight?

  • Were there any really big ideas or that wasn't more quantity rather than quality, or what they wanted to big ideas that were hidden in the fine print?

  • We're also looking for a savior budget, a budget in a crisis because the economy is in deep distress and we needed something to boost demand so they could have gone either way.

  • They could put hands money in the hands off farmers rules.

  • Demand is at its lowest point that most of us can remember.

  • They could have done that, but what have they done when re guys down?

  • Bm Kasan money that goes out 75,000 calls the same as budget estimate last, and they couldn't spend that amount.

  • So instead they decided to go maybe sensibly.

  • Many of you would agree with infrastructure infrastructure where is now totally dependent when you look closely at the figures totally dependent on a huge disinvestment, target the disinvestment target.

  • If we don't reach, it will not get infrastructure.

  • This investment target for this year coming here is 210 lack crows.

  • Never before the last time it was 65,000 close 1 30 Gonna go from 65 to 210.

  • Black crows.

  • It's a huge ask would be very, very dependent on that coming through.

  • And it does take time.

  • Of course, they do have a lycee, but we have some issues that we need to discuss about.

  • Ally sees.

  • So with all these different options own car.

  • Well, the budget donna economy around.

  • Give us hope for that.

  • We really need it.

  • If I were facetious, I'd say my Brigitte Bardot visit.

  • But I mean, but I mean, honestly, honestly, I mean, I I have been so disappointed not because of the length of the speech or all of it.

  • In a time when you needed a completely focused budget.

  • Your cupboard is bare when you're covered his bear and you want to do a boost.

  • Pick three or four things for Max and really give it ammunition, right and ensure that it is going to be worked out and done within the year.

  • Instead of doing that, you take up every project which at one point or the other, the prime minister has given his sanctity to and you decide to put bits and bobs into it all the way through the budget without any direction.

  • It's a budget which has no structure.

  • I mean, it's one of the worst budgets I've come across in the last 30 years, if not the worst.

  • Tell us what you really feel.

  • Region.

  • No, but you have a point in the sense that this was a time when you needed we're in a crisis.

  • We needed a crisis budget.

  • And it's just a budget for a normal year.

  • Actually, we have with us Doctor Amit Mitra, the Finance minister.

  • West Bengal.

  • Thank you very much for joining us before.

  • Before I ask you about this budget, I do want to surprise all our Panelists on the viewers by asking which was the state last year of India, which had the higher fastest growth rate last year, stayed GDP.

  • I'll give you three off.

  • Well, believe it or not.

  • Sorry.

  • Yes, I believe you're asking me.

  • Yeah, you're asking.

  • Well, I'll tell you right now you're asking me.

  • Well, I'm delighted to say it's West Bengal.

  • According to government of India data, 12.58% growth of GDP last year.

  • 18 19 On this year, the data is just coming in when India is going at 5%.

  • I got into you today.

  • West Mingle will grow a double digit for sure over 10% again.

  • My God So yes, West Bengal.

  • India needs to learn from West Bengal.

  • But we've been saying that for ages they're not catching up.

  • But tell us now coming to the But today's budget is this going to make us go from 5% to 7% to 8% Get us out of, ah terrible slump that we're in very, very disappointing and I think, as own Car said, I agree with him its direction less not.

  • We need to understand that the GDP lowest in 11 years.

  • Private consumption expenditure lowest in seven years.

  • Investment lowest in 17 years.

  • Manufacturing lowest in 15 years.

  • Agriculture wasting four years and most of importantly, your indexes.

  • Three major indices that have fallen Global hunger index.

  • Do you know that we've come down from 99th position, 203rd position further down, and Pakistan is ahead of us.

  • Enjoy Sri Lanka Global Social Mobility Index by the world Economic forum just published We become 76th out of 82 and you very well know Democracy Index.

  • We fell by 10 points.

  • So you're not only talking about the numbers that you're talking to talking about the qualitative decline off the entire economies, supply chain management, the deep rooted problems with regard to different sectors you won't get into.

  • And in this environment, what do you expect?

  • I would have expected a rambunctious budget, which takes risks, which says, Okay, I'm gonna pull this economy out of its current stupor with bold moves.

  • What in fact happens more than toe to our speech with lot off poetry and drama, and what comes out is a whimper without direction, without clarity.

  • I was sitting there thinking, Wait a second.

  • Very.

  • Are you taking the country toe?

  • Pull it out of this, Morris.

  • Where are those solid Marcus?

  • I was most surprised that even those which are there having undermined the core off core schemes allocation falls by negative 9%.

  • You're talking about Mahatma Gandhi.

  • The 100 days work reduced by 13% jobs and skill development.

  • I heard a lot of it in the budget.

  • Fact is allocation reduced by 7% reduced negative 7% and commerce and industry again.

  • I heard a lot about that.

  • I happened to look after Commerce, Industry Ministry as well.

  • Of the small state of Bengal, commerce and industry reduced our location by negative 4.8%.

  • So where is this to me?

  • It looks like we were in I C U.

  • And now we're being pushed into the ventilator.

  • As far as the Indian economy is concerned, I'm worried about that.

  • But what you from I C u the ventilator?

  • Is it compared your on a ventilator now?

  • But were you expecting too much?

  • A lot of people are disappointed with the lack of any direction in this budget, but people expect too much off from a fiscal stimulus.

  • So my sense is that if you be realistic, there wasn't much fiscal space.

  • You've done monetary easing.

  • There wasn't much that you could do in terms of macro policies.

  • So people were expecting that either she will do too much off our fiscal stimulus and have large deficits.

  • And then there were those who were arguing that if she does that, then you know you could fall in towards debt trap because currently we have high interest rates and not very high growth rates.

  • So to be realistic, there wasn't so much that could be done, given the way tax revenues have, especially since corporate tax that dropped by 150 like crows.

  • I mean, that was a terrible decline compared to the budget estimate.

  • And if your tax revenues are not doing well, GSD has not been doing well.

  • So if your tax revenues are not, But that's again, a reflection of the state of the economy.

  • So you're so Amit Mitra, would you have liked to see a bigger punch in terms of expenditure in this one kind of crisis here, and let the budget deficit will get a little bit not out of control, but go to 44.5%.

  • Is that what you'd like?

  • I think what is important is there is a bluff element in this, which I'd like to bring to your attention.

  • The target for budget deficit was 3.3%.

  • They have admitted that target is 3.8% but the former finance secretary of India has just written a beautiful blawg in which he estimates that This is a bluff and I say it again.

  • It's a bluff.

  • Why?

  • Because off budget monies are being quietly put in a word for your listeners.

  • What is an off budget?

  • You basically want, for example, the railways to have a scheme.

  • So you get the Finance Corporation of the Railways to pay for it doesn't come into your budget doesn't become a part of the fiscal deficit.

  • Same way, part finance corporation piece what Mr Garlic suggested and I agree with him.

  • The rial deficit is in fact, much, much higher.

  • It ranges between 5% to 6.3% according to two different studies because of the off budget cheating.

  • I'm calling this bluff and let me tell you the order to control an auditor.

  • Generalised said officially bring made this transparent.

  • Tell us why you're quietly hiding below the budget.

  • All kinds of boring Zen expenditure.

  • What is your policy?

  • So my submission to you is that instead off hiding this come up and have the courage to say okay, I'm gonna go for 4.5% fiscal deficit which will result in downgrading of India by some agencies which may result in withdrawal from my stock market.

  • It is a considered risk you take from which you steam McCain's e and stimulation of the economy, which all economists understand.

  • This was the time this was the time that because of man made impact off if a d monetization and unprepared ust you cannot corrected by simply bump rhyming the economy a bit here and there out of a business cycle, it has to be a big hit.

  • Now, question is not only there is no big it.

  • What has been cut is from the bottom of the pyramid in terms of putting money into the hands of the agricultural sector, putting the money in the hands of the small and medium enterprises where the maximum marginal propensity to consume is at the bottom.

  • We, the upper middle class of middle class, we save much more, so we don't put back into the market corporate tax cut.

  • Nothing went back into investment.

  • So my submission to raise it not only risk was not taken with regard to fiscal deficit, whatever was taken avoided.

  • Those very people who were can spend the money in the market at the bottom and middle end of the pyramid right.

  • Thanks very much.

  • Very clear.

  • And you know your economics inside out.

  • You've done it for years.

  • Private sector now in the government Just wanted clarify marginal propensity to consume.

  • You mean they consume more of the income than the middle and upper middle class is the savings are less than I should put your hand one in their hands if you want demand to go up who can spend much more policemen?

  • Lawyers to add, uh, Brian gets Give me 30 seconds.

  • Yes, you're on l I c I heard you mention jealousy.

  • Yes.

  • Life insurance co operation today has 30,000 crores as nonperforming assets.

  • That is a big worry.

  • No.

  • Why?

  • Life insurance has been forced by this government toe by private sector any day any, um, shares to be sold.

  • So you know it bought 7000 crores worth off.

  • Call India that phone call investment public sector phone call and has outside.

  • I mean phone call investment from one public sector being forced to buy from another public sector and nobody knows it.

  • Now you end up saying I'm not gonna privatize a lycee.

  • Hello.

  • Ally sees 30,000 crores of np A because you made L i c and l I see something in all of us.

  • I'm sure have something in l i c, the common people.

  • It's a very dangerous proposition, right.

  • You ruin it.

  • And then you say, OK, now I'm going to sell.

  • Sell you off.

  • At least it'll make it transparent, right?

  • What least will be transparent door up?

  • That's something that worries you that if you go into stock market, you have to disclose if you doing, I pull.

  • You'll have to disclose all your holdings and all the dirt will come out.

  • But let's be honest.

  • The desk been accumulated over 30 40 50 years.

  • Everybody is passed on the buck.

  • Every every government that makes the foreign governments on that.

  • Yes, but tell me, oven this 210 lack crows for privatization.

  • When last year did it 65.

  • Is that Is that a crazy number?

  • They just had to do it.

  • Bring your You've done this many times, not fiddle the numbers to make sure your deficit is looks good, work backwards.

  • First, liketo give a perspective, which is different from the one you had If I made Yeah, yeah, sure of course.

  • Now, when you're talking about the budget and GDP right, which is my focus.

  • Right.

  • Primary emphasis on reform.

  • There are three aspects.

  • One is the fiscal deficit.

  • Right.

  • The fiscal deficit has expanded by 10.5% which is thought to be the maximum under the F r B m.

  • I would like to hear.

  • Does anybody wanted to have expanded by more than five plus 50.5 or less than I think that is that they did the maximum?

  • You know, that is a little off balance sheet.

  • I'm sorry.

  • I'm sorry you have dealt with these things for 25 years.

  • That's why I don't surprise You don't remember 11 year in which there was not a CIA bordering from from banks.

  • Okay, That was never on the budget.

  • Just because it's not from the banks but from another source doesn't change anything.

  • So what matters is the change change from before?

  • I have not seen a single number I've seen.

  • I've talkto private analysts will given me numbers that it is excellent I which is no transparent it is in the budget.

  • It is not correct that it's hidden.

  • The government has listened to these analysts and it's there in the budget in a separate appendix.

  • So if you want to pursue that, I'll come back to it.

  • The second aspect is expenditure.

  • Okay, Within that 0.5, what can you do?

  • You can only shift expenditures from one head to another.

  • The key even you're talking about GDP is the multiplier, the expenditure multiplier.

  • There is an R B.

  • I study these numbers I have not seen.

  • I just heard them.

  • The numbers quoted a little while back that the infrastructure multiplier is three the Madrigal multiplier.

  • This 30.5 now you want to shift it from infrastructure to Mandrake offshore?

  • Go ahead.

  • But don't tell me that it's to promote GDP.

  • Okay.

  • Second, before you believe those numbers, they're not approximately correct the direction.

  • I don't believe the exact number, but the relative stuff Yes, I believe over what period of time?

  • You know, structure three.

  • You have a different view.

  • You not let me finish my question on your statement.

  • You want to get the economy out of a trough right now.

  • Infrastructure takes how long to get your treat?

  • Multiplayer of three.

  • Well, these infrastructure projects are not starting today they're going on.

  • Somebody just said that there is not enough money, so if you move the money in there, they will come back to your third point.

  • Third point is very quickly.

  • Okay, It's but it's a good which is actually the negative.

  • I don't think they've done enough.

  • Is the tax reform if you wantto, she can tell you more about animal spirits, credibility, et cetera.

  • I'll only say this because everybody has criticized the corporate tax, which I 100% supported.

  • Why?

  • Because in the second budget off, call it India.

  • 123 I don't know what you want to call it.

  • Call it the one they had promised this okay, and it has not been done for five years.

  • I think that credibility was gone.

  • The animal spirits were down partly because of that that they promised something and didn't do it for four years.

  • So they had to do it to the store credibility.

  • I don't agree, but where I am a little disappointed is that direct tax court.