Slogans modified. No efforts to revive the Economy.
In a surprise, Dr. Ananda Nageswaran, Chief Economic Advisor, with his team of more than 150 people, produced an Economic Survey 2025 with certain critical comments. (He may be on the way out.)
The report started with a note of caution and fear that global monetary policies are likely to change due to geopolitical tensions. [The threat from Trump is clear. In February, Modi and Trump are going to meet, and we will import more weapons from the U.S. and reduce our tariff barriers to help the U.S.]
Viksit Bharat Not Possible
The GDP growth is projected at 6.4%, down from the 6.5% to 7% projected last year. The survey states that to reach Viksit Bharat by 2047, the economy should grow at 8% per annum. We are nowhere nearby.
Agriculture and services have grown, but manufacturing has weakened due to global demand, they say. In the era of deglobalization and protectionism, you can’t depend on the global market.
The survey in detail repeats the Financial Stability Report (FSR) of RBI, though it is not serious about NPA reduction, which has been achieved more through write-offs rather than recovery, as the RBI has cautioned. It does accept that the haircuts to admitted claims of NPAs are a whopping 69%. [Admitted claims are much less than the loan balance and accrued interest.] So, the banks are getting only a pittance.
Savings and Interest Concession to Rich
Though the survey says savings should be encouraged instead of investing in stock markets, it does not talk about the diminished interest rate provided to depositors by the banks. It also does not mention that 449 corporates have availed loans above Rs.100 crores each at less than 5% interest. To cater to the rich, the poor and middle-income depositors are paid very little interest on deposits. For savings bank accounts, the interest has come down from 5% to 2.5%, and for fixed deposits, from 18% to 6.75%. This is a serious area of concern that the CEA and FM have ignored. The performance of Regional Rural Banks (RRBs) has been appreciated, but there is no effort to expand them.
In revealing data, it is stated that China provides 200% of GDP as loans, Malaysia – 126%, Japan – 122%, Thailand – 122%, and India – 56%. So, India has a huge opportunity to increase credit, which will boost the economy. For that, branch expansion and massive recruitment of staff are needed. This has not been talked about.
Education in Turmoil
On education, the data is appalling. The retention rate in Class 1-5 is 85.4%, in Class 1-8, it is 78%, in Class 1-10, it comes down to 63.8%, and in Class 1-12, it is 45.6%. So, not even 50% of the children are completing Plus Two. With NEP, this will further worsen. The Gross Enrolment Ratio in colleges for the 18-25 age group is only 28.4%. By 2035, it is projected to reach 50%. So, when we reach 2047, Viksit Bharat will still have at least 40% of the youth without a degree and 50% without Higher Secondary. The demographic dividend?
MGNREGA and Regular Jobs
The data also shows that the number of mandays of work under MGNREGA has come down to 220 in 2024-25 from 389 in 2020-21. The average days of work provided to a family have come down to 42.77 from 71.5, whereas the demand is for 200 days of work and a wage of Rs.600.
Only 24.9% of males and 15.9% of females have regular salaries. The average is 21.7% for males and females. This is very low when compared with developed as well as developing nations.
Caution on Mental Health
The Economic Survey talks about mental wellness and workplace environment in an exclusive chapter, which is to be appreciated and taken note of, but the FM has not done that.
The recommendations of the survey are:
- Improvement in Consumer Confidence
- Wage Pick-up by Corporates
- Improving rural demand with Agricultural production
- Easing of Inflation
- Stable Macro Economic Environment
- Global Competitiveness
- Grass-root structural reforms
The survey insists on building trust of the people, but how is not clear.
The recommendations are not reflected in the budget, and depending on corporates to create jobs is an illusion. We have been following this illusion for long, from the Arun Jaitley days of 2014-15.
Some leading newspapers have reported that this is the 8th consecutive budget of Ms. Nirmala Sitharaman, and it’s a new record. This is not true. Her first budget was only in 2020-21. Before that, Piyush Goyal presented the budget in 2019, and Arun Jaitley in the previous years. Newspapers should do a fact check.
The Budget 2025 is nicely worded with attractive slogans in Hindi, beautiful promises with an ardent faith that the people’s memory is short, and they can be sold promises which will not be met. The FM stated that India will become the toy producer for the world. Does she mean 142 crore toys in her hands?
Most of the toys we get in India are from China. How does she make these funny statements?
Promises
Let’s have a quick glance at the dreams sold by Mr. Arun Jaitley in 2014-15:
- 2 Bank Accounts for every house with loan credit
- Revitalise small savings
- Pilgrimage rejuvenation – PRASAD
- National City Heritage Development (HRIDAY). Kancheepuram and Velankanni were in the list of 6 places with a promise of Rs. 200 crore. Those in Tamil Nadu can say what has happened in 10 years.
- Sarnath – Gaya-Varanasi- Buddhist Circuit (Now Ms. Nirmala talks of a similar circuit)
- Rs. 2037 crore Namami Ganga (one year alone). Has Ganga become clean?
- Sports University in Manipur (It has enrolled only 184 persons so far.)
- Organic food promotion for North East (I was there a few months before. Even Sikkim is not producing much organic food now.) There is no restriction on chemical fertilizers and pesticides.
Next year (2015-16) he announced further:
- Housing for all by 2022
- 24-hour power supply to all houses.
- At least one job for one family
- All villages to be electrified by 2020
- 2 lakh km of all-weather roads to villages
- Medical facility in all villages
- Universal Social Security System
- Senior Citizen’s Welfare Trust & support for equipment
- NAI MANZIL for minorities to have formal school education
- VISAs on arrival for 150 countries
- One major Central Institute in every state
He also stated that in 2014 Swiss authorities had shared details of money kept by Indians in Swiss Banks and it would be brought back. He also said those who have cheated about their income would be in jail for 10 years.
On GST
On GST, he said, “It will be an India where the Centre and States will work harmoniously towards the common goal of shared prosperity. The unanimity of the Constitutional amendment and the consensus at the GST council highlights that India can rise above narrow politics for the nation’s interest. With GST, neither the Centre nor the States lose their sovereignty. In contrast, they will pool their sovereignty on decisions on indirect taxes.”
But today, the opposition-ruled states feel they are cheated. This budget has reduced Finance Commission grants to states to Rs. 1,32,767 crore, whereas in 2023-24 it was Rs. 1,48,522 crore. This is only an example.
Nirmalaji’s Promises
In 2020-21, Ms. Nirmala Sitharaman promised:
- Aspirational India
- Economic Development for all
- Caring Society
- Digital Governance
- National Infrastructure Pipeline
- Disaster Resilience
- Pension & Insurance Penetration
This has not been done. In last year’s budget, she announced 1 crore employment by providing Rs. 15,000 pm to big companies. How many have been employed in the last 11 months? Why is there no mention in this budget? Why is inequality increasing? Why are there so many riots and attacks on minorities? Why is there no review of digital governance? What has been achieved by NIP? Why does the government want to amend disaster management and absolve its responsibilities, including writing off loans of those who are affected? Pension penetration in the country is not even 50%, including Atal Pension Yojana, which gives a paltry pension. What happened to the Universal Pension? Will 100% FDI in insurance increase insurance penetration? They will concentrate only on the rich. Only LIC and GIC can help, and they require staff.
First, the FM should present a report card of 10 years. There is such a huge gap between the promises and actual spending.
This Budget
- Jan Dhanya Krishi Yojana for 100 districts to help 1.7 crore farmers. We have to wait and see what this scheme is.
- KCC for 7.7 crore farmers is inadequate. 11 crore farmers are covered under the PM Kisan Scheme. At least they should get KCC. 50% of the population is dependent on agriculture.
- India Post cannot fulfil the tasks listed out in the Budget without massive recruitment. These works are now outsourced. That’s not going to help. What is needed is to convert 1.5 lakh post offices into universal bank branches and recruit adequate officers and staff.
MSMEs
Increasing the norms for MSME will only help the bigger units and rich businessmen to benefit
This is not going to help the 5.7 Cr MSMEs. A few of them will benefit.
Is it Bihar Budget?
Keeping in mind the Bihar Election, National Institute of Food Technology, Greenfield Airport, Brownfield Airport, Expansion of Patna Airport, increasing seats in IIT Patna, and many more promises are given. Will they be fulfilled?
Technology?
For AI, last year Rs. 551 crores was allotted. Now another Rs. 500 crores. China has gone ahead with Deep Seek and more than 50 AI tools. Our private corporates in IT have failed miserably. What are we doing? Our investment in R&D is too low so far. Now Rs. 20,000 crores has been promised for S&T. AI research needs much more.
Gig workers need Provident Fund, Gratuity, Pension, and assured employment, not just Health Insurance.
For states, Rs. 1.5 lakh crore is given as a loan for infrastructure, not a grant.
Asset monetisation is selling public assets to private entities on a platter.
Lower allotments
Some of the allotments are much less than the Actuals spent in 2023-24.
The Budget for Home Affairs keeps increasing in leaps and bounds. Have we become a police state? Why not tax the rich? Why not provide school education free? Why not provide health care free? Why not provide one government job per family? Why not introduce an Integrated Rural Development Programme II & an Integrated Urban Development Programme?
We are 105/127 in the poverty index. 1% own 40% of the wealth, and the bottom 50% owns only 3%. From 109 billionaires in 2014, we have reached 200 dollar billionaires, whereas we could not remove poverty.
The income tax exemption up to Rs. 12 lakhs needs explanation as the slabs are showing differently. If the income exceeds Rs. 12 lakhs, you have to pay from Rs. 4 lakhs, and it amounts to Rs. 80,000 tax and more if income goes up. In a week, the FM has promised a new tax regime after the Delhi elections are over. We have to wait and see if there is another Jumla.
Promises are not enough. Please act, Finance Minister.
Thomas Franco is the former General Secretary of the All India Bank Officers’ Confederation and a Steering Committee Member at the Global Labour University.
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