Budget making is largely about economics—but it does need to be garnished with a dash of politics as well. Few in India would know this as well as finance minister Pranab Mukherjee, a skilful politician and tactician.
In an interview to television channel CNBC-TV18 that is also being published in this edition of Mint, the pulls and pressures that will eventually lead to Budget 2009 are quite evident.
First, there is the need to maintain balance between two conflicting economic objectives—tax cuts and a dose of extra spending to help a weak economy, on the one hand, and the need to bring down the huge fiscal deficit, on the other.
Second, there is the tension between economic goals and political ones—the need to reform the economy further while also funding expensive but politically attractive social schemes as promised in the Congress’ election manifesto.
Mukherjee will have to pull off something that will calm the markets, impress business groups and reach out to the aam aadmi. We wish him luck. He will need it.