When this Budget is compared with budgets of the past prepared under similar trying circumstances, Chidambaram has done a very good job indeed.

Having covered, in one way or another, 33 budgets since 1980 and, furthermore, having written their potted history since 1947 for the finance ministry, there are three things that I can assert with confidence.

First, budget analysis was much better before TV, with its instant analysis, came along.

True, that when budgets were presented at 5 p.m., analysts for newspapers also didn’t get much time. But they at least didn’t sound off without even a look at that little booklet called Budget at a Glance, leave alone the Finance Bill and the Explanatory Memorandum.

Second, the budget division of the finance ministry gets its numbers right.

In the mid-1980s, acting on the orders of a super-aggressive editor, I had tried to pick holes in the numbers, only to be told the next day by a family friend who was also a very senior official in the budget division not to be a “fool” (muttal). He was right.

Third, budgets are about taxes, and to comment on them without a long hard look at the Finance Bill is simply too foolhardy. The mischief is in the details and, as Finance Minister P. Chidambaram has advised, patience, prudence and restraint pay rich dividends.

Rajiv’s legacy

Few know it but Mr. Chidambaram was faced with an extremely hard task and when this Budget is compared with budgets of the past prepared under similar trying circumstances, he has done a very good job indeed.

India generally responds well to hard times, especially the hard times caused by external factors. There have been some notable exceptions, of course.

In 1979, Charan Singh presented a budget that failed completely to take into account the doubling of international oil prices. It was left to R. Venkatraman in 1980 to come up with some sensible policies.

In 1988 and 1989, Rajiv Gandhi who could not decide when to hold a general election — in 1988 or after a full term in 1989 — forced his finance ministers (two in two years) to present disastrously populist budgets that hugely bloated the budget deficit, as it was called then.

In 1990, the V. P. Singh government, advised by none other than finance secretary Bimal Jalan, also failed to take into account the looming disaster.

In 1991, Yashwant Sinha (under Prime Minister Chandra Shekhar) was actually prevented by Rajiv Gandhi from presenting a budget. Rajiv, in spite of pleadings by the Government, had decided to pull it down.

That aborted 1991 budget was full of sensible ideas. The credit for it went in July to Manmohan Singh. Likewise, Mr. Sinha’s 1998 budget, in the aftermath of the Asian crisis of 1997, was also a sensible one.

The macro balance

That is why it is crucially important to look at Mr. Chidambaram’s 2013 budget from the perspective of macro-economic management. The fact is that India is highly vulnerable today to a balance of payments crisis by the end of the year.

In plain language, the economy has to contract just as it had to in 1980, 1991, and 1998. The problem is that in the last few years we have become so addicted to growth that the finance minister cannot make bold to say so. Messrs Venkatraman (1980), Manmohan Singh (1991) and Sinha (1998) were not faced with a similar constraint.

So, while Mr. Chidambaram talked — a little sheepishly, I thought — of growth of over 6 per cent but below 7 per cent — he has made sure that this will not happen. Six per cent, we could live with but anything more than that is going to be a problem.

The reason is simple: we are not exporting enough because the world is not buying enough but we are importing a lot.

Until the global economy turns around, therefore, India has a serious problem of meeting its bills. So it has to suppress aggregate demand without actually saying so.

Judged by that yardstick, Mr. Chidambaram has done what he had to. He has put the national interest before that of his party’s.

Of course, there will be some collateral damage to business but that’s the way the game is played — roughly, if you want to do the right thing.

tca.tca@gmail.com