As the Budget 2008 unfolded itself, a general sense of optimism spread around. This was the election year and PC couldn’t get it wrong. The Budget had something for everyone. The Indian farmers were given Rs 60,000 crores of loan write-off, the salaried class got huge tax breaks and the small businesses were given ample growth and saving options. All this is courtesy P. Chidambaram.
Indications of what the Budget might hold were given when the Economic Survey of the financial year made a strong pitch for more aggressive reforms. But PC surprised everyone, such that the usually loud and complaining Opposition found it difficult to find arguments and enthusiasm to criticize the Budget. It was truly an election Budget.
A top newspaper, in its headlines the next day, read ‘All lines open for voting’. In fact, the Budget was part of a grand reality show that Indian elections have become. With this being his large Budget before facing the electorate, PC has accessed his entire menu of options and hit every hot button at his command. However, as most reality shows do, the results will be kept till the finals and even here, PC will have to wait and see if the Budget, in which he tried broad-spectrum support, has hit the audiences to vote. In fact, by this budget, PC has kicked off the campaigning for the General Elections 2009. Populism was expected, but this extravagant flow of money to appease the masses is something hard to digest. If one analyses the Budget, one can see that it is nothing but a bunch of promises. The only promise that is expected to be kept is the portion on ‘tax-benefits’. However, the main stress of the Budget, that is agriculture, may find it difficult to improve even in the face of this massive largesse from the great Central Government.
PC has very conveniently announced a massive Rs 60,000 Crore loan waive for farmers. However, he did not say who would bear this cost: the Government or the Banks. How has the Government come to this figure of Rs 60,000 Crore? How does the Government plan to distribute this massive project? Nothing was said, and PC wants everyone to believe that this is the best possible Budget, but then how will he implement this huge policy?
The Government’s pet project, the NREGA is in shatters. Recent television reports have shown that the policy is not even implemented properly in Rahul Gandhi’s constituency, Amethi. While PC has increased the NREGA to all 596 rural districts of the country, he has effectively bypassed the question of its implementation at the grassroots. The Budget has skirted the three big-ticket reform issues: disinvestments, FDI in retail and labour reforms. While the public sector savings account for 3.2% of the GDP, a major improvement from their being negative till 2001-02, there are any number of loss making units which should be hived off. This could raise much needed funds for improving social sector infrastructure.
It might be too much to expect the finance minister to take the retail bull by its horns in an election year. However, it is important to protect organized labour and lass making PSUs, while not devoting sufficient attention to creating a comprehensive social safety net. This is essential to have a skewed idea of what people-friendly policies are all about. This is PC’s grand aam aadmi budget. So join the celebration, as we watch the Great Indian Election unfold. To vote for PC, SMS CONG to 2009. Farmers can call on the toll-free number, 60,000 but let us not forget that this grand budget soap opera is like the computer command *DEL : nothing really happens and nothing really will happen.