FEBRUARY each year is a budget presentation month. First to be presented is the railway budget that is eagerly awaited, primarily because, one suspects, people want to know whether railway fares have been increased or lowered, their primary concern. Then comes the Union budget which draws more attention again, largely because the average earner want to know whether he has to pay more or less income tax and what goodies the government is willing to dole out to various sectors.
The Times of India (February 27) commenting on the Union budget said “going by market cheer, budget 2010-2011 scores on feel-good” and “its revised middle-class friendly tax slabs are a major mood-enhancer that’ll promote consumption and savings”. Also, said the paper, “since tax concessions usually mean better tax compliance, the government may rake in greater revenue. There is also good news, according to the paper, “in that the 5.5 per cent fiscal deficit target remains unaltered and anticipated 8.9 per cent growth is no longer a pipe-dream”. The paper noted that “as expected social sector spending has been enhanced” and “several innovative ideas are tucked away in the budget such as the proposal to auction mining licenses that’ll help make the sector less of a political playground”. And the paper commended the Finance Minister, Pranab Mukherjee for acknowledging “that economic well-being is ultimately an issue of governance and reform.”
The Hindu (February 27) said: “The real story of this budget is not of any big idea or innovative strategy, but one of fiscal consolidation.” The paper noted that “income tax-payers have gained significant relief from broadening of the income slabs and from tax deductions” and that “as in the earlier budgets, much of the focus on the expenditure side is on social sector spending”. It regretted: “The right to education bill passed last year is still to make its impact felt, while the Finance Minister has increased the allocation for upgrading the quality of school education.” Nothing in this budget, said the paper “are the move on reforming the financial sector”, and added: “Overall the budget has had a positive impact on business sentiment and the animal spirits of the market.”
Deccan Herald (February 27) thought that the Finance Minister “seemed to have banked heavily on growth prospects of the Indian economy to present a budget that aims to bring back fiscal discipline”. The paper commended the Minister for his plan to reduce the fiscal deficit in 2010-2011 to 5.5 per cent of the GDP but slyly added: “Mukherjee perhaps is trying to make people happy by cutting income tax and not touched subsidies keeping an eye on the votes needed to upstage the communist government in West Bengal next year”.
Writing in The Indian Express (February 27), S Gurumurthy, well-known commentator on political and economic issues, dismissed Mukherjee’s presentation as intended “to conceal more than it reveals” and that “in fact, it cheats”. Coming hard on the Finance Minister Gurumurthy said Mukherjee “has trusted in the propensity of instant commentators on TV to rely on ornamental words”. Making a detailed study of the budget, Gurumurthy damned Mukherjee for “sleight of hand in his claims on infrastructure”. He said: “The claim by the Finance Minister that the infrastructure provision of Rs. 1,72,552 crore is 40 per cent of the plan allocation is less than honest. Acting cleverly, he does not give comparative figures for the current year.” Indeed, said the critic: “There was no appreciable improvement in the coming year over the current year and yet the experts continued to eulogise the infrastructure boost in the budget.” One gets the impression, though, that Mr. Gurumurthy is critical for the sake of being critical though, his comments for that reason cannot be easily dismissed. As he angrily points out, “the Finance Minister’s claim that he had cut taxes to put extra cash into the consumers’ pocket is less than honest” strengthening his argument by quoting facts.
In the matter of the railway budget, the media was not particularly happy. Hindustan Times (February 27) said: “The railway budget exists only because it gives the opportunity to a union minister-usually a member of a party allied to the leading party in the government- to pull out a few rabbits from his or her hat.” The paper cynically noted that “with the media trained on the minister for one day, what better platform to dole out a few goodies to one’s electorate” exists? Commenting on the likelihood of the Railway Ministry planning to set up “a dedicated railway television channel”, the paper asked: “Does that shock you? Well, what shocks is that we still have a railway budget.” The Hindu (February 25) thought that the current railway budget “will be remembered for its intentions and policy pronouncements rather than for specific budgetary measures”. There had been criticism that Mamata Banerjee was “focussing inordinately on her home state, West Bengal” where elections are due next year. Maybe for that reason, the paper felt she had tried “to evenly spread the proposed new projects among different regions”. The paper made specific mention of the fact that Ms Banerjee has promised “an India-Bangladesh rail link to commemorate the 150th anniversary of Rabindranath Tagore”.
The Times of India (February 25) damned the railway budget for lacking vision, saying it was “strangely lacking in foresight and long-term measures”. Said the paper: “None of the initiatives she presented can be pointed to as clearly counterproductive” adding that “they seem a scattershot combination of populist measures rather than a cohesive strategy”. The paper made special reference to the fact that the market’s reaction said as much, with rail stocks plummeting in the aftermath of the budget. Pointedly it said that what Ms Banerjee had done makes it “difficult to avoid the conclusion that she had carried on the venerable tradition of using her position to cement her political base.”
Indeed, that seemed to be the general feeling in the entire media. The paper specially pointed out: “Initiatives and projects have been launched without due consideration of how they are to be operationalised.” Deccan Herald (February 25) thus said that Ms Banerjee has shown that she obviously “does not want to antagonise her voters” in West Bengal where she wants to be the next Chief Minister by doling out goodies.