| Font Size |
Deep deficit, shallow response make hope, market sink
The unambiguous mandate that the Congress-led UPA received in the general elections had re-ignited expectations of systematic reforms over the next five years. Mukherjee did not manage expectations well and missed an opportunity to showcase UPA II’s commitment to bold actions on several fronts — be it disinvestment, labour flexibility, targeted subsidies or structural tax reforms.
On cue, the Bombay Stock Exchange Sensitive Index (Sensex) tanked 870 points or 5.83 per cent, the sharpest fall ever on a Budget day.
Mukherjee’s speech had all the accompaniments of a Budget that he would have presented 25 years ago. Old-fashioned but shrewd, the Finance Minister showered benefits on all stakeholders: marginal tax sops for the salaried, excise duty cuts on a host of items — from LCD panels to gems and jewellery — retaining excise, customs and service tax rates at existing low levels and, surprisingly, giving a bonanza to the upper middle class by doing away with the distortionary 10 per cent surcharge and doubling the threshold on wealth tax of 1 per cent to Rs 30 lakh.
He kept the central excise rate, customs duty and service tax rates intact. He hiked the minimum alternate tax for zero-tax companies to 15 per cent — not seen lightly by India Inc. Even as he did away with the commodities transaction tax, he retained the securities transaction tax creating arbitrage opportunities between two segments of financial markets. Mukherjee’s direct tax measures were revenue neutral, but in indirect taxes, the additional resource mobilization was a meagre Rs 2,000 crore.
After all, it was an expenditure budget.
He used all available resources for enhancing allocations of existing flagship programmes such as the National Rural Employment Guarantee Act.
He also set aside modest sums for new social sector schemes such as Rajiv Awas Yojana and Pradhan Mantri Adarsh Gram Yojana for villages which have a Scheduled Caste majority.
His large expenditure plan — the total spend tops Rs 10 lakh crore for the current fiscal — has given him the confidence to assume a growth rate of 7 per cent in the current fiscal with inflation stabilizing between 2 per cent and 4 per cent by March 2010.
Playing along the fiscal stimulus plan and recognising that infrastructure was one area neglected in the last few years, Mukherjee facilitated Rs 1,00,000 crore worth investment in public private partnership projects through a refinance window made available by IIFCL.
The veteran politician in Mukherjee ensured that his presentation was not chaotic — just two interruptions by Lalu Prasad Yadav and Mulayam Singh Yadav — and devoid of announcements that would evoke strong sentiments. “He did not have to make big announcements just for the market,” said Vijayan Krishnamurthy, Executive Chairman, JP Morgan AMC, adding these can be undertaken outside the Budget.
The speech, as expected after the poll outcome and the President’s speech, focused on inclusive growth and bridging the rural-urban divide by promising banking presence in all unbanked blocks, housing for urban poor, 1 per cent interest relief for farmers who paid short-term crop loans on time, 45 per cent hike in allocation for Bharat Nirman and a new scheme for 1,000 villages with Scheduled Caste majority.
Perhaps, Mukherjee believed that big-ticket reform measures need not be announced in the Budget. Yes, he did not steal the thunder of his Cabinet colleagues but did not read the pulse of the market either.
Discuss this story on expressindia forums
|
|
Mr. Mukerji's buduget with all due apologies to Mirza Ghalib is stated in this verse," Bahut Shor Suna Tha Is Budget Ka, Cheera to Aam Aadami Ka Khoon Paya"Mr. Obama is working overtime to use nation and its resources to turn the corporates around, Where as Mr, Singh and Mr. Mukerji is expecting and rather, waiting for corporates to turn around the nation.What is the point in goverment of this size and stature when they are admitting that to execute key projects they are expecting people from corporate world to come and take control. Is the goverment accepting the fact that its massive bureucracy is incapable of executing key project like UID project? What is the point in implementing the pay commisions recommendations in haste if we have no answerablity of this gignatic govt set up. As a taxpayer I will like rather the Goverment to awake and cut down its size in order to save on incapable bureaucracy and honest taxpayers money. "Ghalib Hai Is Sarkaar Ka Andazee- Kaam Kuch Aur"
The Govt of India in its Union Budget is wasting a huge amount for the Defence for buying costly equipments for war fare. If this amount is spent for the poor, we can remove poverty from india. please think on this matter. Why spending such a huge portion of the budget for non fruitful purpose.
i think this good budget because mr. mukharji kept huge fund for creating infrastructre. it will generate employment through various projects.
While the budget focuses on 'inclusive growth' is it possible without sustaining the growth momentum. For quite sometime we worshiped at the shrine of economic growth.We recorded impressive growth in the neo-liberalist phase.We continued to sutain growth rate even in the midst of global economic meldown. Indian economy is no longer a sleeping giant. However after the budget India.inc appears to be somewhat dissatisfied, and this should have been avoided a bit with cuts in corporate tax and other incentive mechanisms to upturn the downturn.Unfortunately almost all our budgets are a mixture of 'good politics and bad economics'.Fiscal deficit is the measure with which international agencies like W.B. and IMF are going to rate us.Fiscal deficit has widened to 6.8 % of our GDP in 2009-10.One is reminded of Herbert Hoover said once "Blessed are the young, for they shall inherit the national debt'.
If Team of Manmohan, pranab,montek and chidambaram cant produce the reformist budget whome we can rely on. vajpayee and Rao were better. In the definition of AMM adami the middle class is forgotten.
Normally when corporate says it is a bad budget it means it is aam admi budget so also when common man says he is not considered that means it is capitalistic budget. Unfortunately this time no one is enthused. May be expectations were quite high and people were accustomed to election oriented budgets. But every one should remember that India cannot be island in this world of horrible times. Institutions and assets are accessible to every one across globe. Hence any green pastures will be devoured by rest of the world. Cash planning has to be in tune with global realities and can not be spent recklessly. Already we have leakage pipes through which subsidies are dolled out. End user hardly get 5% of the allocation. That being reality, the Indian Finance minister has done a job which neither increases tax base nor opens up new areas of expenditure. How ever the governemnt still has another four budgets to qualify.
It is a budget designed by a "licence raj" devotee, belonging to that era. It is out of time and out of line with India's aspirations. Growth, education
The exemption limit has increased by 10,000 rupees only is not sufficient for salaried class. the sixth pay commission is implemented almost all employees of governments and the income has increased rapidly but the exemption limit is raised by 10,000 rupees.its not a great relief. the exemption limit should be raised by at least 50,000 rupees.over all budget is fine from the economies point of view.its a good budget in the period of recession.thanks to prime minister and the finance minister.prof.rcgoeldepartment of economicsGovernment college ,dausa rajasthan.
Pranab Da and Mamta Didi, did what was expected from them. The comprehensive mandate for the Congress Party goes in vain and people are bound to suffer for the next 5 years with such direction less people dealing the finances of the country. This budget is the worst ever.
It is astounding that the Finance Minister has taken so many months to produce this garbage. When expectations were running high and the descimination of the left made people hopeful of a pathbreaking budget, the FM not only put cold waters on this but gave a directionless and lacklusture budget.
It is like a movie production where the artists are all well make up but without a proper script or dialogue for picturisation!
This is the best budget by any government at the Center, looking at the poor people. No government has ever looked down on the poor for their betterment.
Wastage of time and money for producing such a useless budget
The good part of the budget is that for the first time, promises have been made with a number commitment. That means its measurable. Earlier FMs never did that. The bad part is that it smacked of politics .. with Maharashtra and West Bengal elections in mind. Bihar has been made to suffer just because it spurned Congress.
As has been said, "people get the leadership they deserve". Given the mindset and ignorance, the people of this country do not deserve any thing better. So please don't weep now. face it for five years
one of the best budget considering all section of the society.
Well done Pranab Da but we belonging to middle class family wants more from You.
Hi Requesting the media to highlight the issue of rising food products and petroleum products. That would be a good boost to the middle class pockets.
In every budget since 1952 all Finance Ministers are committed to assure food, water , shelter, education and health care. Where have all the funds gone? Now we know why politics is a dynastic industry.
let me ask you one thing UPA......which one are you good at?.you cant handle external affair,you cant handle finance...Aam admi is the sufferer....dont speak this slogan always. Bengali babu is failure in this budget like he was as an external affair minister.10,000 rs.....its a joke on the part of indian tax payers. I pity on those who selected these so called leaders at the centers.....
By removiing the FBT govt has doled out big gains to the rich (those in the highest tax bracket - people say a saving of Rs.10000 p.m. on an avg) even as it pretent to help the large number of tax payers in the lowest bracket has got virtually nothingby, just an increase of measely Rs.10000/ in the threshold limit for IT. With fuel prices having hiked to the level it was when crude was trading at $ 130/ pb and with inflation (CPI) running at a high and furhter with corporates taking undue advantage of recession and melt-down by denying any increase in the salary of the staff and workers, this is a rude shoke. In any case Congies are great at serving their patrons by fooling the ordinary masses. By getting afree run for next 5 years, they have proved that we Indians are easily manageable (m)ASSES.
There is no relaxation to salaried person. Rs 10000 increase in slab is a joke with the feeling of the salaried person. there is not any beneft package for middle class person.
This UPA government has completely failed the federal fiscal policy by involving in cheap dirty politics even in important thing like federal budget,which should serve every citizen of the country equally,how can be inclusive by excluding a very important state like bihar.it is criminal to totally forget about rehabilitating the kosi flood victim. i would like the chairperson of congress SONIA AND RAHUL to explain to nation why they were so ruthless in dealing and totally excluding bihar.by involving in politics and victamising a state just because NITISH KUMAR has a diffent political ideology from congress sonia gandhi and upa government has shown their real colour,of vinictive, ruthless politics,and keeping their own interest in front of interest of poor and hard working biharis and forgotten KOSI FLOOD VICTIMS.media if not the puppet of congress will fight against this DISCRIMINATORY POLICY OF MRS SONIA GANDHI.THIS WAS INDEED A CRUEL ACT BY FORGETTING THE FELLOW INDIANS KOSI VICTIM
WAKE UP CONGRESS . YOU HAVE FORGOTTEN TO ALLOCATE MONEY TO MUSLIMS FOR THEIR SCHOOLS - COLLEGES - UNIVERSITIES AND MADRASAS . THIS POOR PEOPLE NEED GOVERMENT HELP . THEY VOTED YOU BUT YOU LOT HAVE FAILED TO RETURN FAVOURS IN RETURN .
There seems to be a competition between Congress and Communists,before Bengal Polls,as to who is more reddish compared to blood of aam aadmi. They are neck to neck.There lip-service is worthless and aam aadmi is sufferer.FM has failed to give any worthwhile concessions to aam aadmi in the times of very high prices of essential household items. Only beaurocrats and politicians who'll disburse the Govt. funds under various schemes will be benefitted.This was a missed opportunity, and things will not improve.