Thursday, March 4, 2010


The Union Budget is increasingly becoming a futile exercise

T he Union Budget is increasingly becoming a futile exercise. Each and every year I observe the budget with keenness, expecting that this time there would be some path breaking announcements, which would change the course of India and Indians in times to come. And this year the expectation was even more high as the team was competent, the intent was overtly aam admi centric and what more, there was no challenge of any coalition. But then, the banality of this year’s budget was such, that at the end of it, it only left despair and dejection!

In fact, there is absolutely nothing that is worth mentioning about this year's budget. On the contrary, I was bemused by the fact that why our finance minister (FM) had to talk about launching a symbol for rupee in the budget. I guess, a Republic Day or an Independence Day or for that matter Mahatma Gandhi’s birth anniversary could have been the days to declare such initiatives. Whether we have a symbol or not, it no way changes our national accounting, which is in utter mess! If we have to emulate a dollar, or a euro, or a pound, or even for that matter a yen, there is a lot more to be emulated than just their symbols. But then, our FM did, and with a grin on his face while other parliamentarians, most of whom were half asleep, applauded! Frankly, such rhetoric does not suit our FM, particularly at a time when consumers are reeling under back breaking food prices coupled with slow economic recovery.

Similarly, I did not quite understand as to why the FM had to declare the hike in fuel prices at that forum. Was it that he wanted the Opposition’s focus to rest on this issue and shift it out from other relevant issues? If that was the case, then I would say that the FM was quite successful as immediately after his misplaced declaration on fuel prices, the Opposition staged a walk out. And mind you, we are here referring to national accounting where we all are stakeholders and the parliamentarians are our elected representatives in the house. Honestly, here again, I did not quite understand as to why was the announcement made in the first place and why did the Opposition walk-out? Post the budget session, the media focus shift ed to the Opposition leaders who exhibited concerns over the fuel price hike; as according to them it is going to create a cascading affect, further pushing up the food prices. Well, empirical studies prove that the effect on fuel prices on food is very marginal, and today if food prices are going up, it is not on account of fuel prices or anything that is even close to that, it is only due to the kind of abnormal margins that the retailers are keeping with themselves. Few months back, The Times of India reported that the difference in vegetable prices between wholesale and retail is as high as 400 per cent! And nothing is being done about that! But then as I said, there was no reason for the FM to make such an announcement in that forum.

It is so unfortunate that when the Opposition should have ideally opposed, they applauded and that is when the FM declared tax rebates. This rebate is not only going to increase the dispensable income in the hands of people, which is inflationary, but also cost the exchequer a staggering Rs 26,000 crores! It is not the fuel prices, but this rebate which can be detrimental to any kind of price rise arrest! Lest we forget, what all could have been done with this additional Rs 26,000 crores!

I can endlessly keep writing on most of the announcements that were made that day, and how futile they were. The more I think, the more I get sceptical about the entire session. Probably I was expecting too much…


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