Friday, 3 February 2017

Budget worse than demonetization.

  • Demonetization was a wrong tool for Modi's highly publicized objectives of black money, corruption, fake currency and terrorism funding.
  • His greed to amass Rs.5 lakh crores (as per affidavit filed in Supreme Court) proved blatantly wrong with 97.5% cash returned to RBI.
  • The estimates are that DeMon costed nation, during the 52 day period, is Rs.128,000 crores while benefit of unreturned cash and higher taxes might not exceed Rs.60,000 crores.
  • Modi is answerable under what authority and process of law, he did this non-sense.
  • Modi shifted goal posts to 'cashless transactions' with infrastructure support is at least a decade away.
  • Now Modi & co are relentlessly campaigning that long term benefits will follow due to their courageous & historic demonetization. But in long term many changes good & bad will occur. What relationship they would have with demonetization can't be established?
  • Jaitley says now he has details regarding high value deposits and would persuade them to account for and comply with tax payment. For this purpose Rs.128,000 crore demonetization was unnecessary. 
  • No black money hoarder lives in villages. Most live cities and some in towns.
  • Every person living in dwelling unit above 3,000 sq.ft. in cities and/or riding car with value above Rs.15 lakhs is a possible tax evader and black money hoarder. They could have been investigated straightaway. Toning up tax administration would have been enough.
  • There was no justified reason to destroy RBI and informal economy.
  • What ever money got into banks is at the expense of informal sector's working capital which is now crippled and impacts GDP, growth, tax revenues and above all employs millions of uneducated and less skilled workers.
  • Banks suddenly cash rich has no way to invest and earn and pay depositors. Lending in market is a slow and steady process and will take its own sweet time. How banks will pay depositors is a million dollar question. 
  • With deposit rates slashed by banks, most investors will withdraw or divert their money for higher returns despite some risks.

BUDGET 2017:
  • This is the worst budget I have ever seen. I listened throughout FM speech but found nothing standing out. 
  • Intermittent claps by Modi & co and Jaitley's smiles carries no meaning.
  • The budget claims to have focused on rural spending and poverty alleviation. 
  • When ever budget has huge money, Modi's focus was on 'bullet train' like things and when there is no money, he talks about rural segment.
  • Neither the revenue collections nor external borrowings would be unachievable with the effect of demonetization. 
  • While demonetization had inflicted massive injuries to poor & lower classes, the budget reliefs are like applying some balm which neither cures nor provides total relief. 
  • Urban middle classes who stood blindly & solidly behind Modi, with demonetization not affecting them at all, and with blind belief that somehow 'magic wand' demonetization will work were let down with very low income tax concessions even in Modi's 4th budget. The previous three budgets income tax rates etc remained unchanged.
  • The tone of the budget acknowledges the failure of demonetization and its stated objectives.
The budget speaks volumes about our economic situation, post demonetization, the worst since 1992. The near junk status rating up gradation is a distant dream. Huge revenue deficits even in 4th budget of Modi is unpardonable despite low oil price regime since 3 years. Brexit and Trump policies has destroyed our dreams to build economy on export model like China. PV Narasimha Rao redefined 'self suffciency' in 1992 as 'ability to pay imports through exports' is dependent on external factors on which we have no control. Hence Nehru's self-sufficiency model of producing and consuming within India with some exports & imports, excepting is crude oil, is self sustaining and long lasting. Modi is corrupt, untrustworthy, liar, greedy, selfish, unpredictable, fundamentally hypocrite, shallow knowledge and with hidden objectives. For nation to prosper it is better to get rid of him from centre stage. 

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