6 March 2016: Providing an analysis of the Annual Budget is a routine exercise and part of the academic culture in JNU. Professor C. P. Chandrashekar from the Centre of Economic Studies and Planning (CESP) delivered his analysis of the 2016-17 Annual Budget at the Ad-Block on 01 March 2016 at 6:45pm.
“A budget is an accounting exercise that the state undertakes as a form of declaration, from where it’s going to mobilise its resources and where these resources will be allocated. However, it [budgeting] is not merely an accounting exercise. It is a mirror that reflects the direction in which the country will be led by the government’s policies. Budgets have a redistributive aspect apart from their ‘mobilisational’ and allocative tendencies. The binding restraint that this government under a neoliberal backdrop faces is the need to limit borrowing. Earlier, in the era of planning the constraint was to limit taxation and thereby the ability to mobilise resources”, Professor Chandrasekhar commenced with a preliminary introduction to the Budget and then moving on to a more complex analyses of it.
Referring to the ‘Make in India’ and ‘Start-up India’ schemes, he mentioned, “Foreign finance capital doesn’t like a proactive state- an actor that has a non-profit making role in the market. State’s interference in the markets can bring the interest rates down. If the government borrows and spends frequently, the economy is susceptible to inflation. Finance capital looks at the possibility of making large capital gains. Governments make it easier for them to function when it doesn’t assume a proactive role and therefore, the government feels the need to cut down its fiscal deficit to 3.5%. There is a constant attempt made to delegitimise the state and legitimise the market”.
Prof Chandrashekar concluded his lecture by adding that, “The government has tried to incentivise the private sector to stimulate growth. Hence it has embarked upon disinvestment, which involves handing government assets over to the private sector for less returns. It has also embarked upon an impractical structure of indirect taxation and imposed an irrational morass of cesses. The government is trying to ‘freeze its expenditure’ and re-allocating resources in some sectors. The state has used a combination of deception and sleight of hand, combined with optimistic projections. But has this proven to be a successful strategy? A government that is depending on foreign capital to stimulate growth—how do we except them to define nationalism?”
Aakanksha D’Cruz is an MA student at CPS and works for The Informer
Illustration by Tarique Aziz Laskar