The Hindu Business Line : <I>Today is the Day! </I>

Yes, today is the day of the Big B — no, not the Big B of KBC, but the Budget with the capital B. In a few hours, we will all be sitting down to watch the Finance Minister getting up or `rising' (in customary parlance) in the Lok Sabha to present the Union Budget.

Budgets in the era of liberalisation have ceased to keep the country on tenterhooks. In bygone days, the approach of the B-Day raised the blood pressure of everyone beginning from the average householder to the suited, booted, perfumed gentry of business and industry.

The socialistic pattern of society and its outgowth, the licence-permit-quota raj, saw more and more exactions loaded on the scarcity-ridden economy, the taxation rate at one time crossing 98 per cent of income. Nani Palkhivala, the foremost taxation expert of the country, aptly remarked that since a person who earned Rs 100 was left with only Rs 2, he lost all incentive to create any more wealth than Rs 2.

Everyone breathes easier these days, Budgets holding no terrors for him/her.

Mr P. Chidambaram is the 29th Finance Minister since Independence. He is not yet anywhere near Morarji Desai who set up a world record for the maximum number (10) of Budgets, or even near Dr Manmohan Singh or Mr Yashwant Sinha, both of whom have the distinction of presenting five Budgets in a row during their tenure.

Onion Budget

It is, however, easy to predict that in one respect, Mr Chidambaram's Budget will score over all the rest:

The amounts of receipts and expenditure will exceed Rs 700,000 crore each, as against Rs 500 crore or so at the time of Independence.

C. Subramaniam, who was Finance Minister of the erstwhile Madras State in the 1950s, used to recall with a chuckle the audible gasp of excitement in the State Assembly when he placed a Budget that for the first time touched Rs.100 crore (as against income and outgo each close to Rs 40,000 crore at present)!

Until October, everything was going on swimmingly for Mr Chidambaram. National savings rate and investment ratio were at their highest at around 35 per cent each and what have come to be known as `fundamentals' never looked better.

All the signs were that the Budget will be a cake-walk, a Grand Levee, as it were, what with the economy humming musically and with Mr Chidambaram hoping to be at his relaxed best while delivering his speech, throwing a concession here, a couplet there.

But alas, things have worked out badly lately. The Union Budget may turn into an Onion Budget, with tomatter (as tomato is universally known in North India) as the main subject-matter. The spectre of inflation has begun to haunt Budget-making, and spoilt all the fun.

By the way, I doubt whether the phenomenon should be called inflation with all the standard explanations tagged on to it. To me, it looks more like the onset of a high-cost economy.

May be, India is fast catching up with developed countries, all set to lose the one competitive advantage of wages and living cost differential, it has had — an inevitable consequence of so much money sloshing about in terms of salaries hitting the roof, profits scaling new heights, and hundreds of billions of dollars pouring in on various accounts.

So, it is not just a question of tinkering with prices of onions and tomatoes, but making a holistic appraisal of an entirely different set of causative factors.

Mr Chidambaram says that a lot of `thought and passion' has gone into the Budget. We will not have to wait long to see what they have wrought.

B. S. RAGHAVAN