But apart from the deficiencies in the budget-making exercise, what are the signals thrown up by the changes? The decision to revoke the hike in urea prices is clearly a consequence of political pressure, and dashes all hopes for any initiatives so far as reducing subsidies is concerned. The move to reduce the special customs duty is obviously the result of intensive lobbying by the affected industrialists. Yet here again the finance minister has taken the easy way out, and haskept the hike across the board, with some exceptions. Instead, an exercise should have been carried out to determine which industries were in need of such protection, and the duty levied selectively. Yet some of the changes announced will be welcomed, such as removing the withholding tax on external commercial borrowings, the withdrawal of the increase in petrol prices, and the exemptions for exporters. The markets should also applaud his reassurances on buy-back of shares. Of course, the concessions will result in the deficit increasing by another Rs 3,600 crore, but, as Yashwant Sinha has pointed out, there are several cushions in the budget. The India Resurgent Bonds, for instance, seems to be designed to attract money stashed away abroad, and could result in substantial inflows. Disinvestment too could be stepped up, although that again may face political hurdles. The Samadhan scheme could be a potential money spinner. But although government borrowing may not increase very substantially, the fact remainsthat the government is in no position to curtail expenditure, and it is desperately looking for ways to increase revenue. The other signal which the changes convey is that the government's precarious political position means that it will give up economic initiatives at the first hint of opposition, and this could well make its promises of opening insurance, closing sick PSUs and pruning its holding to 25 per cent in non-strategic PSUs so much hot air. The ability of this government to deliver the goods is now a serious question.