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LATEST NEWS UPDATES | Budget 2017: High on rhetoric, low on delivery -Himanshu

Budget 2017: High on rhetoric, low on delivery -Himanshu

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published Published on Feb 3, 2017   modified Modified on Feb 3, 2017
-Livemint.com

While there have been some positives, including the reforms on political funding, the real test of the budget was the ability to manage spending to revive the economy

This was the fourth budget of the National Democratic Alliance (NDA) government. Coming at a time when the world around is full of uncertainties, more was expected from the budget than what has been delivered.

The domestic uncertainty is certainly the outcome of demonetisation. While there is consensus that the economy will slow down by 1-1.5 percentage points from the growth rate of 7.9% (as per final estimates) in 2015-16, the exact nature and quantum is yet to be made clear.

At a time when the estimates of GDP growth for this year have already been revised downwards and the macro indicators of private investment and non-food credit growth are pointing south and non-performing assets of banks are still a problem, the revival of the domestic economy is the first priority. But this is all the more difficult with the external environment becoming unpredictable after Donald Trump took over as president of the United States.

The uncertainty is not just around the political environment but also over the impending rise in petroleum prices and growing protectionism in the industrialized world. The Economic Survey had correctly highlighted some of these and so did the budget documents.

But what is certain is that the demonetisation exercise did lead to suffering for many of the small and marginal farmers. It also led to suffering for the small and medium enterprises, particularly the informal sector, with stories of job losses and businesses closing down. Some of this may have come to an end with money supply increasing but there is no denying the fact that this did add to the misery of an economy already suffering through demand compression for the last two years.

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Livemint.com, 2 February, 2017, http://www.livemint.com/Opinion/Pm5MVhsCsQSN4bMcon35XK/Budget-2017-High-on-rhetoric-low-on-delivery.html


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