Tweaks and treats

If for no other reason, Mr Pranab Mukherjee should get a mention in India's economic history as the third Finance Minister to present a Budget six times. But what will mark the latest exercise is the moment of its presentation: India is on the cusp of a history-changing phase. It has shown the world its potential to lead the way out of its sluggishness with robust confidence in its own recovery. And yet, with a large number of Indians still huddled beyond the glittering lights of GDP numbers, the promise seems fragile.

Mr Mukherjee's Budget for the coming fiscal appears to have grasped this essential challenge; if his policies are any indication, then he has realised that the government's role in this new decade is not simply to cheer GDP growth but to pull along the vast number of Indians restive and restless at their deprivation. This Budget, therefore, is generous to every marginalised section of Indian — from the very senior citizen to the scheduled tribes, through tax exemptions for the former and public spending for social projects for the latter. He began thus: “At times the biggest reforms are not the ones that make headlines, but the ones concerned with the details of governance which affect the everyday life of aam aadmi .” He insists the Budget is informed by this ethic so he spreads the goodwill generously: turning to the organised sector he maintains the status quo on Central excise, contrary to popular expectation, because he “would like to see improved business margins translated into higher investment rates”; status quo on peak Customs because of “global uncertainties” and tweaks excise and Customs to aid the farm sector. Agriculture comes in for special treatment from enhanced credit to incentives for investments in basic and allied activities to reductions in duties. The Finance Minister assures the organised economy of more divestments, raises the limits for foreign institutional investors in corporate bonds significantly, promises incentives for small and medium enterprises and funds for public sector banks, not to mention tax exemptions for very senior citizens. The Budget has something for everyone and in the process loses focus on the most essential responsibility of the government: to govern well.

The Budget focuses on IT solutions to reform dismal governance and, like its predecessors, harps on performance evaluating systems that have had no effect so far; it offers nothing to convince Indians that “the details of governance” matter enough for those in charge to make the budgeted promises work on the ground.

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