| Published on 02-03-2007 In National |
| Viewed 1835 times |
| A Different feeling this budget gives, Mr.Chidambaram |
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Written by
Girish Nikam |
When Finance Minister P.Chidambaram had presented his budget last year, there were very few people who had anything to complain, including the left parties, which were constantly at loggerheads with his policies. But this year a plethora of complaints from all sides, political, corporate and the common man, has taken the wind out of the budget. And the popular Tamil daily down south, Dinamalar, headlined PC's budget thus: Dog food becomes cheaper!
A blogger has even asked the Harvard-educated Chidambaram to learn from his rustic colleague and Railway Mantri Lalu Prasad Yadav! There could not have been a more damning indictment, I am sure from the finance minister's perspective.
Having said that, why is the latest budget seen as what it is? One cannot really blame Chidambaram for it, caught as he is under conflicting compulsions to address the immediate problem of the rising inflation and the need to bring about drastic reform measures and the long-term strategy to keep the economy buoyant and the impressive growth rate going.
Working under the shadow of the electoral defeat of his party in the Assembly elections in Uttarakhand and Punjab, and with the price rise being seen as one of the major reasons for that debacle, the focus has naturally shifted to inflation-control measures.
However, experts and political critics have pointed out that despite the slew of measures, which includes cuts in custom duties and excise, various programmes and schemes for the agricultural sector, it is commonly believed that all this is unlikely to have any short term impact on the rising prices.
However it is believed that the decision to stop futures trading in rice and wheat, like it was done for pulses a couple of weeks back, may arrest the upward spiral, but may not bring down the prices.
The warning was clear in the Economic Survey that followed PC's budget, which did not give much hope of the control of inflation this year very soon, though the measures being taken may have an impact in the longer run.
The target of course is 2009, when the next lok Sabha elections are scheduled.
Yet, Chidambaram has done well to control the deficits and stick to the targets set up under the Fiscal Responsibility and Budget Management Act. The impressive 9.2 percent growth rate, record tax collections, major hike in investments in both agriculture and social sector, a slew of welfare measures like creating jobs for physically handicapped and measures aimed at backward classes and minorities as well as the senior citizens are all a welcome feature.
One of the best things he has done is for the senior citizens, by introducing the reverse-mortgage of houses, which should keep the elderly who are lucky to have houses of their own, away from penury, and depending on their children or relatives for running their lives.
However, for the salaried class as well as the investor class, the budget is no major relief, despite the token hike in standard deductions. In fact for the investor class, the hike in dividend distribution tax on companies and mutual fund and liquid funds, is a sore point.
Even though he has announced a reduction in ad valorem excise duty on petrol and diesel, there is unlikely to be further reduction in prices, as it would be adjusted against the reduction announced a couple of weeks back.
For Chidambaram used to the accolades almost every time he has presented the budget, this year it is a different feeling, what with the stock market crashing too. Therein lies a good reason for him and his Prime Minister as well as the UPA chairperson, Sonia Gandhi to think. Or like he always believes, he may be thinking that he will have the last laugh. But for that to happen, he needs to work hard and convince not just the cat and dog lovers.
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