Sinha had counted on getting Rs 9,200 crore from improved tax compliance on an enlarged tax base; from this additional amount he had taken credit for Rs 7,425 crore for the centre (the balance being the share of the states). But revenues from excise and customs have faltered badly and are lagging behind target. The failure to collect taxes is glaring.

The finance minister had assumed an economic revival. He had programmed a larger public investment to pull the economy out of the recession. But the plan for expanding public investment has been folded up. He hasfailed to push through a counter-cyclical strategy. The industrial economy remains in the doldrums. This, in turn, has depressed revenue from indirect taxes. (Low prices of oil imports are not the only villain of the piece). So, the hole in the budget has got larger than Sinha had imagined. Worse, he does not know how the deficit will measure as a proportion of the GDP. The economy's growth seems slated to fall short of the 6 per cent plus he had assumed. This is the reason why Sinha says he does not know where he will be able to peg the deficit (as a proportion of the GDP). But all this speaks poorly of Sinha's understanding of the economy and his ability to manage the nation's finances. Sinha is desperately trying to shrink the size of the hole in the budget. He took credit for Rs 5,000 crore through the sale of PSU equity. But disinvestment can only be made at a discount to market prices.

Warehousing the PSU shares to be sold with financial intermediaries (FIs) has been proposed with a claw-backprovision after sales are effected. FIs are willing to go along, on condition that the government does not directly sell PSU shares until the warehoused equity is disposed of. Effectively, that will mean eschewal of disinvestment for the next couple of years or so. The alternative being explored is to get rich PSUs (principally those in oil) to dip into their reserves to buyback their equity (from the government). This is not a bad idea. The government's stake in PSUs equity will remain intact. But the government will have consequently moved away from privatisation. Its sole objective is to get money out of PSUs, any how.