Budget 2010

Once you go through the fine print in Budget 2010, you ask yourself what does it actually do - for R.K. Laxman’s “common man”. Everybody is waxing eloquent on the budget – calling it a budget for the “aam aadmi”. I would like to debate that for a moment – who is India’s aam aadmi? Is it the educated employed, is it the uneducated employed, is it the farmer, is it the son of the soil, is it India’s super rich, or is it the vast majority of unemployed who cannot afford to have a square meal a day? I leave it to you to decide who is India’s aam aadmi.

Who has the budget benefited? This is a no brainer, with the salaried tax payer and individual tax payer getting a lot of relief through stretching of the tax slabs. There is a little bit of everything for taxpayers who benefit. But what is the percentage of tax paying populace of this vast country? Excise has been raised on petrol and cement which will have a ballooning effect on prices of food and housing. The common man who is looking for relief from the high food prices may have to wait some more time for the “budget benefits” to kick in.

On the economic front even though the budget has been a decent exercise in balancing – much will depend on delivery. It is a known fact that fiscal discipline on the expenditure side is very difficult to contain with politicians of all hues taking on unviable projects for their constituencies which ultimately end in benefiting the politician and his close coterie! To bridge that gap you end up taxing the common man with more of indirect taxes!

Trying to keep the budget deficit pegged at 5.5% is going to take a herculean effort, as the fiscal management bill faces a lot of resistance. Nobody like to tighten his purse strings in government – more you spend the more chances that you end up making some money for yourself. Just have a look at first time politicians who suddenly become wealthy after five years in government – whether at local, state or national levels.

I would prefer to wait for six months to see whether the budget delivers on promise and actually manages to cut down on the budget deficit – talk is cheap, performance is what matters. I sincerely pray that this government performs so that the entire nation benefits.