Monday, June 15, 1998
The rolling budget
The finance minister has been rightly criticised for not anticipating many of the consequences of his budget proposals. Surely he would have been advised of the adverse consequences on certain industries of the 8 per cent special customs duty, or the effect of withholding tax on foreign borrowing? It is difficult to believe that he was so naive as to believe that there would be meek acceptance of his proposal for a hike in urea and petrol prices.
Growth or the rupee
The Reserve Bank's measures to stabilise the rupee may have worked, but the fact remains that monetary policy is on the horns of a dilemma. The RBI, or rather the finance ministry, seems to be unable to decide which target should be a priority -- the value of the rupee or interest rates.
Will Yashwant Sinha's opus do the trick?
It is astonishing that in analysing and presenting a critique of the central government's budget, most analysts and critiques focus on those nuts and bolts and washers -- and small ones at that -- which evoke a populist response. Attention, thus, comes to be concentrated on the small benefits and petty losses incurred by this or that group of people.
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