Letters to BS: Budget 2018 presents the biggest challenge to Modi govt

With reference to “Budget 2018 will be Modi govt’s biggest challenge in 4 years” (January 16), since the clock started ticking for the presentation of the Union Budget 2018-19, every one, including those associated with its formulation, finds themselves on their toes. One tends to agree with this report’s observations that “all factors considered, this budget presents the biggest challenge to the Modi government since coming into power”. More so when the economic scenario presents a worrisome picture towards low growth numbers, subdued investment sentiment and a widening deficit. With just a year more to go for the next Lok Sabha elections, the government may find itself in a Catch-22 situation. In fact, it may have to make an extremely difficult choice between populism and rationalism.

Significantly, the inflationary tendencies have already set in the economy which could go on to jeopardise the government’s game plan to spruce up growth and the investment cycle. Incidentally, the next bi-monthly Monetary Policy Committee meeting of the Reserve Bank of India is also scheduled for the first week of February and any marked upsurge on the inflation front may dissuade the RBI from announcing any rate cut, much to the discomfiture of the concerned quarters. It may also be significant to point out that the global prices of crude oil have already touched around $70 per barrel, and such a rising trend could have a cascading effect on our economy. With the government’s fiscal deficit target of 3.2 per cent GDP also likely to be missed, quite effectively meeting the emerging challenges may truly be a daunting task for them. In any case, the ball currently lies in the government’s court and let us wait and watch until the B-day when the cat will be finally out of the bag.

S Kumar, New Delhi Letters can be mailed, faxed or e-mailed to: 

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