The interim budget has been on expected lines with Mr. P. Chidambaram deciding to play it safe rather than inviting the wrath of the middle class. While the cuts in excise duty for the automobile sector, and consumer and capital goods will bring tangible benefits to customers and the respective industries alike, the absence of concrete measures to put the economy on a trajectory of high economic growth is disappointing. Crippling cuts on capital and Plan expenditure that would create assets and boost growth cannot be considered a pragmatic measure by any measure. The challenge before the next government is to kick-start long overdue economic reforms.
The interim budget is a well-conceived, election-centric, policy instrument that will serve to resuscitate the falling political fortunes of the UPA government. He has made an attempt to reach out to a wider spectrum of the aam aadmi from behind an otherwise uninspiring budget as far as vision and development are concerned. It is a budget with more political than economic content.
In every budget, Finance Ministers announce sops to farmers and create the impression that farm credit has gone up. This time too, the Finance Minister has claimed this saying that farm production has reached a higher growth level. It is farmers who need to be congratulated and the weather gods thanked. The unfortunate fact is that investment in farming is on the decline.
The interim budget has been planned with the general election in mind. The “one-rank, one- pension” decision has been made mainly to counter Narendra Modi’s assurance on implementing it if the BJP came to power. The irony is that the Congress vice-president is taking credit for it. Earmarking Rs.1,000 crore for the Nirbhaya Fund is but a cosmetic step as crimes against women only seem to be rising across the country. In a nutshell, this budget is nothing but a vote-catching exercise. Whether it will help the UPA cling on to power needs to be seen.
The Finance Minister’s aim to place India’s economy in the third place after the U.S. and China is laudable.
The importance given to farmers reminds one of the Gandhian philosophy of agriculture being India’s backbone. Jarring is the move to make cars cheaper, as what is needed is to improve our major highways and provide an impetus to better public transportation projects. The move on student loans is welcome. Overall, the interim budget seems to be a balanced one.
Though the Minister has tried to chart the UPA’s ship through troubled waters using facts and figures about the economy in the last decade under the UPA, the grim reality is that we face high unemployment and low investor sentiment.
The reactions of Opposition leaders to the budget are on expected lines. The decision to modernise post offices is praiseworthy. The Indian Post and Telegraph Department is one of the least expensive but efficiently run government departments in India and deserves upgradation.