ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Ideas and Ideal in a Budget


The 2019 national budget has been widely commented upon by several leading economists and commentators who have subjected it to a critical analytical scrutiny. The pragmatic orientation of a budget is too obvious to be overlooked. It has followed the age-old precedent of accommodation of competing interests, even though this is beset with several contradictions. Although the central government makes rhetorical claims that it focuses on pro-poor reforms, at the operational level, the allocations in the budget have also been made keeping in view the appeasing of certain social groups, such as the Scheduled Castes, Scheduled Tribes and the middle classes. It also acknowledges that the category of poor is not a politically effective category, and hence the need to break it down into concrete specificities. On the one hand,

although the budget has increased taxation on the super-rich, like those earning `2 crore, to contribute to the growth of the economy, it still has to cajole the corporate sector for investment of resources.

This kind of announcing of diverse proposals and schemes in the budget is quite intriguing for those who attribute such announcements to a ruling party that has a precarious majority in Parliament. Such parties are assumed to be often vulnerable to pressures in order to accommodate political as well as social demands for increased social spending. It is in this sense that the budget exercise acquires, by default, a socially progressive character. But, it does not follow from here that parties with absolute majority will present a radical budget taking full responsibility to produce the sphere of competing opportunities by itself. This compulsion could be understood in terms of a party’s ever present anxiety to keep its electoral support intact, at least in the case of some social groups. Similarly, it needs to also assure private interests/players of political stability which is necessary for attracting investments and capital accumulation. This is a kind of pragmatic consideration of the liberal ideal that stands on the availability of widespread competing spheres of potent opportunities. Such competition does produce layers of equality but over time it is bound to exacerbate intra-group and inter-group inequalities which need to be controlled by continuously creating the conditions that are necessary for making such spheres competitive and expanding their social base. The radical will of the government is based on the creation of more competitive spheres of potent opportunities for people to move from worsening conditions of existence to ones that are better or improved. The Indian economy has not been able to create such spheres and this is obvious from the fact that 93% of jobs are available only in the informal sector. Again, the government’s and market’s inability to create the competitive sphere has led jobseekers to bring the aspirational pressure on a few competitive spheres such as the civil services, professional courses and whatever little employment opportunities are claimed to have been available in the government sectors. Obviously, only a few can access and have the privilege to occupy such spheres. The growing demand for the reservation quota, therefore, reinforces the skewed nature of the ideal of competition.

Undoubtedly, it is the market that by its very logic produces inequality at different levels in the lives of the people. But, a strong government finds it difficult to mitigate the inequalities on its own, given the existing framework of unequal structures and processes. In fact, it seeks to mitigate the inequalities that are not its own creation but handed over to it by the way the market operates. The question is, how does it mitigate the market-produced inequalities? One, of course, is through expanding the size of the quota.

Other measures, such as crop insurance schemes designed for farmers as subsidy arising out of the need of the farmer to cope with crop failure, in its ultimate sense would benefit the private insurance companies. Such insurance has hardly provided any relief to the farmers, however. Subsidies are not a substitute for inequality; in fact, such measures perform the function of enabling people to cope with distress only in the short run.

Compensating for the effect rather than eliminating structural anomalies is always instrumentally rational for any government which is compelled to address the question of basic inequalities that are created by the market. Compensation becomes a standard by which the government can assess the values of the victim or the compensation seeker. The government should address and eliminate the conditions that eventually lead to the demand for compensation. For example, the government has to take several serious and sincere measures to remove the distress condition of the farmers. Compensation arguably is the logical outcome of the government’s failure to address the conditions that give rise to the demand for compensation at the first instance.

Apart from other things, the budget seeks to use the libertarian idea of compensation to achieve its aim of postponing the realisation of the liberal ideal that has a bearing on the need to create more attractive and sought-after spheres of competing opportunities.

Updated On : 17th Jul, 2019


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