Friday, July 11, 2014

Constrained Budget

Excessive expectations cannot but lead to disappointment. It is no wonder therefore that popular reaction to the 2014-15 budget presented by Arun Jaitley is rather muted.

The speech was long and dreary. However the message was loud and clear. Though it was his maiden budget, the Finance Minister did not act like a tyro. Arvind Mayaram, the Finance Secretary, has perhaps ensured continuity in government's approach despite change in the ruling party.

Constrained by legacy and handicapped by short time (for preparation), the budget was as good as possible in the circumstances. Nevertheless, there are questions to be raised. For example, should the government allocate Rs.200 crore for putting up Sardar Patel's statue? Hopefully, someone would seek judicial intervention to arrest unconscionable waste of public money. There is no need to compete with Mayawati and splurge on statues.

Jaitley, true to his character, has been magnanimous in not blaming his predecessor for fraudulent deflation of government expenditure in 2013-14 to display 'efficient management' of fiscal situation. It is time government started accounting on accrual basis instead of cash basis.

It is unlikely that Jaitley will deal strictly with owners of black money. The minister should know that a good person is not necessarily a good citizen and much less a good minister.

Emphasis on infrastructure is long-sighted and welcome. Scaling up FDI in insurance and defence sectors is appropriate. Willingness to pare down government ownership in public sector banks to 51% is a smart recognition of reality.

Manmohan Singh has lamented the absence of roadmaps. Undoing the mammoth mess that he bequeathed is not amenable to PERT charts.

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