What are sops?
This is a question every person following the budget analysis of 2019 thought about for a moment. “A thing done as a concession to appease someone whose main concerns and demands are not being met are called sops.”
With less than 6 months before the upcoming elections, India's ruling party the BJP turned the latest budget into an election manifesto. Here are some of the highlights:
• These budget showers Rs 6,000 per year on each of 120 million small farm owners. The first instalment of Rs 2,000 per farm owner will be disbursed in the current fiscal year itself, boosting rural incomes and possibly the Bharatiya Janata Party’s election prospects.
• TheThe budget will fully refund income tax on incomes of Rs 5 lakh per year, benefiting 30 million middle-class taxpayers including small businessmen who form the BJP’s core support base.
• A new pension scheme has been proposed to benefit at least 100 million unorganised labourers, providing an old-age pension of Rs 3,000 per month.
The questions which arise after this budget are numerous. Whether these last minute husting before the elections will actually work. Are sops a substitute to actual economic reforms and developmental investment? Will the benefits announced to farmers actually benefit the people who deserve it? We can only wait and watch.
Will these freebies and sops actually let the Modi government return to power? Many economists suggest that India will not be able to meet its Fiscal and Revenue deficit for the year If this expenditure continues. Will this excess of governmental spending lead to retail inflation. Looks like that is were this fragile economy is heading. This could even lead to a situation of excess demand in the economy which can turn out to be fatal.
This is a question every person following the budget analysis of 2019 thought about for a moment. “A thing done as a concession to appease someone whose main concerns and demands are not being met are called sops.”
With less than 6 months before the upcoming elections, India's ruling party the BJP turned the latest budget into an election manifesto. Here are some of the highlights:
• These budget showers Rs 6,000 per year on each of 120 million small farm owners. The first instalment of Rs 2,000 per farm owner will be disbursed in the current fiscal year itself, boosting rural incomes and possibly the Bharatiya Janata Party’s election prospects.
• TheThe budget will fully refund income tax on incomes of Rs 5 lakh per year, benefiting 30 million middle-class taxpayers including small businessmen who form the BJP’s core support base.
• A new pension scheme has been proposed to benefit at least 100 million unorganised labourers, providing an old-age pension of Rs 3,000 per month.
The questions which arise after this budget are numerous. Whether these last minute husting before the elections will actually work. Are sops a substitute to actual economic reforms and developmental investment? Will the benefits announced to farmers actually benefit the people who deserve it? We can only wait and watch.
Will these freebies and sops actually let the Modi government return to power? Many economists suggest that India will not be able to meet its Fiscal and Revenue deficit for the year If this expenditure continues. Will this excess of governmental spending lead to retail inflation. Looks like that is were this fragile economy is heading. This could even lead to a situation of excess demand in the economy which can turn out to be fatal.
