Union Budget 2014: Arun Jaitley’s first test for Acche din promised by Narendra Modi

Union Budget 2013 is the all important first test for the government and primarily Arun Jaitly, to showcase the intent of the government.

Author: Sandeep Amar

Updated: July 10, 2014, 9:38 AM IST

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https://www.india.com/business/union-budget-2014-arun-jaitleys-first-test-for-acche-din-promised-by-narendra-modi-92746/ Copy

After a landslide victory and a full majority government after 30 years – Modi and company faces the tough test of living up to their promises. The promises include control of rising prices, bringing back black money, reducing corruption, creating jobs and getting economy back in order.

Union Budget 2014 is the all important first test for the government and primarily Arun Jaitley, to showcase the intent of the government. Till now it has been a lame performance, prices have gone up since the Modi government has come. There are no changes on domestic law and order situation, corruption, state of economy or jobs. Only stock market has shown some upside. On international relations, it was expected that China and Pakistan will be softer – instead China has shown part of Indian territory in the maps of China. And the Indian reaction has been an official “boo-hoo” – just like in days of congress – nothing like the roars which Modi promised during the campaign trail.

There was huge criticism by Modi himself for the lack of intent, shown by the Congress leaders.  But in a period of 45 days – there has not been much intent seen from Modi government either. There has been talk of “bitter medicine” by Modi – which may be a signal for a tighter budget.

With due respect to current situation, in terms of fiscal and trade deficit – a tighter budget is expected. Even RBI changes and economic survey suggests that. An expected growth of 5.5% in GDP – with poor monsoon, external environment and poor investment climate – as per Arun Jaitley. It is surprising how Arun Jaitely and Modi are explaining the same situation now, as compare to the time when they were campaigning for elections. They were calling the Congress government ineffective and corrupt – and when Congress leaders cited the same excuses (as they are giving now) – they called it a bluff. Modi time and again made the point that these problems are very easy to solve – and they are not getting solved since “Ma-bete ki sarkar” is sleeping.

But last few days, especially in the economic survey Arun Jaitley is singing another tune. He backed the economic survey, which emphasized the same rhetorical issues as shared by the Congress government – global issues, poor monsoon and structural issues.

In this background, in spite of huge expectations – Arun Jaitley may present a tight budget. An expected move is increase of private sector involvement in key sectors – the signals have already come in rail budget. But the catch 22 is managing the inflation, at the same time pushing growth and spends in the economy. The deficit will continue to be high, till we become a strong economy and produce goods which have import demand from other countries. Food inflation, lack of infrastructure, failed policy framework for investments are also going to be the key challenges.

Let’s keep the fingers crossed and hope Arun Jaitley pulls out a rabbit out of the hat today and amazes the nation!

Get the live updates of Union Budget 2014 here

Watch the finance minister’s Budget Speech Live here.