The Hindu Business Line : Budget: The unfinished agenda

The importance of being India in the international domain, as the new gilt-edged “trillion-dollar economy,” was on Monday brought into sharp focus at a seminar here, against the backdrop of the Union Finance Minister, Mr P. Chidambaram’s Budget 2008.

Setting the stage for a discussion of this theme, India’s High Commissioner to Singapore, Mr S. Jaishankar, said the latest Budget, the first since the Indian economy broke the psychological threshold of a trillion-dollar GDP, should be assessed in “the longer-term context in terms of reforms.”

The Hindu and Business Line Joint Editor, Mr K. Venugopal, outlined the Budget highlights against the backdrop of independent India’s evolving “growth story.” However, he sounded a note of caution that the current trend of project slippages in the infrastructure domain, especially the “miserable show” in the power sub-sector, could still “stop ... the trillion-dollar economy from cantering” at a desirable pace.

The KPMG India Executive Director, Mr Girish Vanvari, noted that Mr Chidambaram remained “cautious” about future projections, while capitalising on the current reality that “the Indian economy is on a roll.”

Mr Venugopal, seeing the “Budget response” in the light of some stark economic realities such as farm suicides and some other sunshine-aspects such as the performance of telecom and civil aviation sectors, posed the question whether Mr Chidambaram’s proposals would work.

“Not everyone in the political world congratulates Mr Chidambaram for the debt-waiver (for small and marginal farmers.) Some say he has not done enough. Why is India’s agriculture on the rocks? One reason is that irrigation projects have failed to deliver in the last decade or so. The Government’s Economic Survey conceded as much. The weakening farm pulse is such that the only thing that has grown smartly is credit supply.”

Income-tax

On income-tax issues, Mr Venugopal said the Finance Minister was “like India’s spinners: flight the ball more and probably you will get the batsman out.” The current growth trajectory of the Indian economy “is delivering a lot more as tax revenues for the Government.”

However, the “concerns” of the common man, such as the rising food prices, would need to be addressed, and “the agenda is still pretty long” for the future.

In addressing it, Mr Chidambaram might also have to contend with the “fragility of the coalition that he is part of.” And, the issue whether this Budget was “election-driven” was the political bottom-line.

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