Budget Disconnected From People States Not Getting Their Share Of Revenue: Amit Mitra

Amit Mitra, former finance minister of Bengal and well-known economist expressed disappointment that the Union Budget did not address the issues of tackling unemployment and rising inflation, the two main problems facing the “common man.”
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Mitra, who is currently Principal Chief Adviser to West Bengal Chief Minister, in an interview with PTI on Wednesday, claimed that the Budget despite its promise to allow states to borrow more for infrastructure spending was, in reality, giving a go-by to the concept of federalism by not transferring promised resources to the states.
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Experts from the interview:
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Q: What is your biggest takeaway from this year's Union Budget?
A: It does not address the issues of the common man. The very first point is unemployment - You have about 3.7 crore people unemployed in the country. The Budget has not addressed the issue. It has not even mentioned the word unemployment in the budget.
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A recent study shows that those above 61 years are joining MGNREGA for their source of livelihood (a sign of desperation in the face of fewer avenues for employment). Yet, they (the central government) have cut down MGNREGA from Rs 89,000 crore to Rs 60,000 crore (almost by a third). The Budget is sending a signal that we do not care for you and you better find some other source of livelihood.
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Q. How do you see this Budget in the light of the spirit of cooperative federalism, especially given the promise of allowing states greater access to loans?
A: What's interesting is (actual monetary) transfers to the states. That was pegged at Rs 3.34 lakh crore in the last budget. However, till November, they (the central government) had transferred Rs 1.41 lakh crore. Almost half the money promised remains to be transferred to the states. That relates to what you call federalism!
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Similarly, we see states' activities are being hijacked and made look like the Centre's work. For example, the Self-Help Groups (SHGs), PM mentioned in his post-Budget speech. The number of SHGs in West Bengal when Mamata Banerjee-government came into office was approximately one lakh. Now, the state worked very hard for 10 years and got 11.55 lakh SHGs connected with the banks.
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This work has been done by the state government, and this constitutes 14 per cent of the nation’s SHGs, (yet) now, I hear in the Budget about ?SHGs from the central government!
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This is typically (a way of) … taking away the credit from the states.
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Q. The government has spoken of the ease of doing business …
A. The MSMEs (Micro, small and medium enterprises) unable to cope with this so-called ease of doing business (in tackling the red tape connected with GST tax which is imposed on industry) are beginning to exit GST (regime) and becoming informal sector businesses.
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Not a word has been said about the unorganised sector. The sector employs 93 per cent of the labour force of the country. They were badly hit during the demonetisation. The supply chain of which they were a part was broken. What does this budget have for this sector?
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Q. The middle class got some tax relief ...?
A. As far as the middle class is concerned, a Rs 5-7 lakh threshold rise in terms of tax rebate has been given, but then the tax rebates which people got from 80C, 80D sections of the income tax act, ?etc., (tax rebates for saving, paying house rent, medical insurance) have all been taken away in the new tax regime.
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All possible hedges to legally try to keep your income to yourself have been taken away.