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A budget that will please no one

A budget that will please no one
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First Published: Thu, Mar 01 2007. 12 00 AM IST
Updated: Thu, Mar 01 2007. 12 00 AM IST
New Delhi: The Budget presented by finance minister P. Chidambaram on Wednesday is politically unimaginative and uninspiring as well. That the Budget evoked no cheers even from the treasury benches, a rather unusual sight, is a definite proof of this assessment. This Budget is an antithesis of Chidambaram’s 1997 dream-Budget.
Coming in the wake of electoral reverses in two important North Indian states, and with assembly elections in Uttar Pradesh (UP) ahead, one expected that the Budget would address the political imperatives. The key concerns of agrarian crisis, crippling inflation and rising rates of unemployment have not been addressed adequately in the Budget.
One thing is loud and clear; that the Congress party —heading the ruling coalition at the Centre—is in no hurry to call for early elections to the Lok Sabha. Electoral defeats in Punjab and Uttaranchal seem to have convinced the Congress that it would be foolhardy to venture into a snap poll. With a torrent of defeats staring it in the face over the next 18 months in UP, Municipal Corporation of Delhi and in Goa, Gujarat and Himachal Pradesh, the party is at the worst time of its present reign at the Centre.
Consecutive electoral defeats will increase the belligerence of the Left parties and some United Progressive Alliance (UPA) partners in the next year, which may attempt to cobble up an alternative coalition to ward off the negative consequences of being a part of the ruling coalition. By backing off from its moves to impose President’ rule in UP, the Congress has signalled that it can be pushed into submission. The Left parties are bound to push their agenda and keep the government on tenterhooks. The government will be under pressure to put all reforms on the back burner.
The finance minister failed to address the politically sensitive issue of high prices. Except the announcement of a ban on forward trading of wheat and rice and a marginal excise cut of diesel and petrol, the finance minister betrayed little concern for tackling inflation in his Budget proposals. In other words, he has conveyed to the political classes and the masses at large that high prices are here to stay and the government intends to do nothing much to rein in inflation.
Here was an opportunity for Chidambaram to revamp the public distribution system, and introduce alternative delivery mechanisms for better targeting of the food subsidies to the poor and deserving sections. Parliamentary committees have recommended issue of food coupons rather than food grains, on a pilot basis, to the poor to plug leakages in the distribution system. Similar ideas have been mooted for disbursing fertilizer subsidies as well.
On the thrust to the agricultural sector, the finance minister delivered a long speech and did very little in real terms. That over 8,500 farmers have committed suicides after the the UPA government took office did not seem to have stirred its conscience. A human tragedy of this magnitude has a devastating potential on the fortunes of the ruling coalition. The suicides are no longer limited to a few geographic regions. The latest reports of farmer suicides in Burdwan district of West Bengal are a case in point.
The National Commission of Farmers set up by this government and headed by eminent scientist M.S. Swaminathan had prepared a final draft national policy for farmers, with wide-ranging recommendations nearly five months ago to revitalize Indian agriculture. The finance minister said in his Budget speech that the report is still ‘under consideration’ of the government. Is the government waiting for another Budget closer to the election to extract political mileage? It hardly works that way. New ideas and programmes take time for implementation and merely making announcements not backed by visible results on the ground can hardly be expected to give any political dividends.
While increased outlays for education and health over the years are welcome, unfortunately, the social outcomes have not shown a concomitant improvement. Apart from their poor utilization and results, investments in education and health have never proved to be politically productive.
No party has ever won an election in India on delivery of better education and health, while livelihoods and other economic factors like inflation and corruption have been major election issues in the past. Infrastructures like power, roads and water for irrigation have also been key issues in Indian elections. The finance minister and the political leadership of his party seem blissfully unaware of people’s choices and preferences.
The Budget is bereft of any political messages. It has no big innovative ideas or proposals to attract the attention of any section of the electorate. Simply put, this is a “please none” and a politically disastrous Budget.
G.V.L. Narasimha Rao is a Delhi-based political analyst, and the managing director of research and consulting firm Development & Research Services, whose The Bottom Line column appears every alternate Monday in Mint.
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First Published: Thu, Mar 01 2007. 12 00 AM IST
More Topics: Economy and Politics | Indicators |