We've all seen this movie before, haven't we?

Reversing a 20-year trend the government raised tariffs on a range of imported goods in the budget, wrote Prof V Dahejia and Prof P Krishna. "Thus, on imported mobile phones, the applicable rate jumps from 15% to 20%, in addition to a 15% tariff on certain components of mobile phones and television sets." This was justified as protection for Indian industry from foreign competition so that they will increase production and create jobs. This is known as Import Substituting Industrialization and "was a centrepiece of the failed development paradigm pursued in India, Latin America and elsewhere". The real reason is to generate revenue "when direct and indirect taxes are expected to fall short of expectations". Why the desperation for revenue? Because 500 million people in rural areas are to be given healthcare insurance of up to Rs 500,000 per year. This is expected to cost $1.7 billion, Rs 110 billion, per year. Fiscal deficit is to rise slightly but if increased expenditure is for investment then it is not bad. It is the revenue deficit that is the real worry, wrote M Bhusnurmath, and the government is planning to change the wording of the Fiscal Responsibility and Budget Management Act so that figures can be fudged in future. This government has been no different from the previous Congress led government in its budgets, wrote T Kundu. Spending on capital expenditure, which is for asset creation, has declined as has spending on education and health, but revenue expenditure, which comprises payment of salaries, pensions and interest on debt, has increased. Modi was able to mask his profligacy by raising excise duty on oil as international prices fell from $110 per barrel in 2014 to less than $40 by 2015. Now that prices are rising there is rising clamor for a reduction in excise duty. In a sleight of hand the government reduced excise duty by Rs 2 and additional excise duty by Rs 6 but levied a cess of Rs 8 on fuel, thus keeping prices the same. Cess on income tax was increased from 3% to 4%. Cess goes to the central government and is not shared with states like GST so state governments are being cheated of their share of revenue. By law cess can only be levied for a specific purpose but according to a report by the Comptroller and Auditor General, Modi's government has been pocketing this extra money to the tune of Rs 1.70 trillion in the last financial year. General elections next year and farmers are angry for a fall in earnings, opposite to what Modi had promised in 2014 to win an absolute majority in parliament. Hence the massive increase in spending and taxes. As Prof Dahejia wrote, "...we've seen this movie before, and it doesn't have a happy ending." Sadly we have seen as well.