Hi! Here’s a fun take on what must be happening to the poor FM whilst creating the Union Budget. This piece appeared under my column “Tweakonomics” which is carried by the Hindu Business Line. You can read it there at http://www.thehindubusinessline.com/opinion/hard-targets/article8093074.ece; else read it here directly.
Keep reading, keep smiling!
The Finance Minister is a worried man. It’s Budget time after all. The top season for unreasonable demands has just begun at the ministry.
On hearing that the FM met with the “captains” of the Indian industry, Mr Bedi alleged that this kind of a “cricket huddle” should not be allowed in the budgeting process. After all, the Finance Ministry is the Deep Deficit Cutting Association aka DDCA. With personal blessings from AAP, he has asked that the FM step down from this DDCA as well.
But the muffler has more to demand from the business suit. “Why is the FM suddenly backtracking on the fiscal consolidation path for the year 2016-17? We are against this. We are basically against everything that the government does. Book the Jantar Mantar for a Dharna! Be fiscally prudent, keep deficits in check. And be physically prudent, wear a muffler in Delhi.”
“Hmph! Prudent or not, he is definitely impudent,” is what the FM was thinking. But then not for nothing is our FM known for keeping his temper in the most trying of circumstances. The good man sent an entire team from Delhi School of Economics to the AAP office to teach them the basic Keynesian model. “When the private investments won’t pick up, the Government spending has to spur the system. Hence, we may have to go soft on fiscal targets next year, so that growth can be on track.” AAP reacted by sending leftists from JNU to the Finance Ministry, causing a nervous breakdown amongst the younger, innocent economists at the Ministry.
In a wild attempt to get some economic sense going, the FM gave personal assurances to AAP that fiscal targets will only be softened for those financial years ending in odd numbers. Thus, we will stick to the FY16 target of 3.9 per cent like a leech, but we go soft in FY17. AAP has finally okayed the proposal.
The NCP in the meanwhile, believes that it has a master solution for the entire macroeconomic framework. It has asked that tax exemptions be given for not only buying the second home, but also the third, fourth and fifth properties. The moment you give these exemptions, people will start buying properties. Voila! Construction will begin anew and all problems concerning low private investment levels will disappear. Not only that, but as this huge inventory of unsold houses reduces, the banking system will also become robust. This is good fiscal and monetary policy, all rolled into one. Dr Rajan, who shuddered after receiving such out-of-the-bank ideas, has said curtly that there is no need for the NCP to get worried about banks.
The UPA scion, fresh from the Europe sojourn, insists that the Indian states are like the European Union. “I know what needs to be done in the Budget! We need to have a common market and a common currency!” On being informed that we already do (just pass the GST!), the UPA has declared that all brand new ideas pertaining to Europeanising Indian markets will only be discussed on the Arnab Goswami show. Rumour is that Mr Goswami has gone into hiding and will only be seen post-Budget.
The PM has suggested from a remote location in Antarctica, that the FM incorporate a “Lambi Udaan, Sasti Udaan” Yojana to give a boost to the airline industry. Subsidies could be declared for frequent fliers.
The poor FM is left wondering how to handle flights of fancy.