KOCHI: The union budget of 2017-18 neglects rural sector, says eminent economist Dr Sudipto Mundle here. The budget should not have disregarded irrigation and flood management sectors which may adversely affect the rural agricultural sector in the coming days, he said.
Dr Mundle, a member of 14th finance commission while delivering the 18th Malayala Manorama Budget Lecture reveals that the total rural spending in the budget was allocated under revenue expenditure rather than capital expenditure.
Capital expenditure has a future prospect than revenue expenditure which is an expense incurred in the daily management of an economy.
He also argued that agricultural sector which is adversely affected by demonetisation is hard hit by the shortage in fund allocation and this will have a long-term impact in the economy.
He also referred the entire activity of demonetization as a disastrous administrative failure. According to him, people working in the rural agricultural, real estate and white collar job holders of the lower middle class were hard hit by demonetization.
Welcoming the tax reforms by the central government, Dr Mundle said that it will help the lower and middle-class employees who are badly affected by demonetization. But he lamented at the slowdown of private investments in
the country, even though the government is seriously working out to make India an investment-friendly nation. The decision to abolish Foreign Investment Promotion Board should be taken in this regard, he added.
Overall he rated the budget as conservative which does not bring any big bang effect as it was projected before. If the government had rolled out Goods and Service Tax through this budget it would have been considered as a game changer budget after 1991 when the economy was liberalised, he said.