Expectations ran high with everyone awaiting a millennium budget that would have harsh measures spelt out to drag the country out of the fiscal deficit quagmire. Finance minister Yashwant Sinha many felt would bite the bullet and introduce hard-hitting measures to better the economic health of India.

But, it was a mild budget that the finance minister brought in, some changes announced were not welcomed by certain quarters and there was tremendous pressure on the finance minister to roll back these steps. It was then that the finance minister said that there would be no roll backs. This was a firm decision. But, even today, that is, almost four months after the budget was announced, people are still asking: Where are the harsh announcements?"

This year's budget was different as it announced bold measures to prune government expenditure which has gone totally out of control. But, in the bargain the 35 million people living below the poverty line were the worst affected. Hence, the debate continues about whether the finance minister will be able to successfully implement his so called harsh measures. For, it is possible that persistent pressure could in the future result in roll backs.

Fiscal prudence
Fiscal deficit is the buzzword today. All financial institutions both domestic and international seem to be worried about the ballooning fiscal deficit and the adverse impact that it could have on the country's growth. The current budget has also highlighted the fiscal mismanagement. But, concrete measures towards addressing the problem have not been announced. Budget estimates for 1999-2000 put the fiscal deficit figure at Rs 79,955 crore which is only likely to soar further to Rs 1,11,295 crore by 2000-01. In such an eventuality what does the government do?

Borrowing to fund deficit
The lone option before the government is to borrow to bridge the revenue deficit. But, what happens when the interest costs rise and the country gets trapped in an internal debt whirlpool. It is only inevitable that the interest burden will rise to Rs 1,01,266 crore in the ensuing year. This puts added pressure on the revenue receipts. The administrators have to then per force curtail government expenditure. But, this will adversely impact the development expenditure. In short, infrastructure projects which fuel growth will receive lower fund allocations which may result in the economy marching backwards.

Where did we go wrong?
The budget seems to have altogether ignored the issue of a falling FDI and looked past qualitative curtailment of revenue expenditure. The government seems to be filling its revenue coffers by exerting pressure on excise and surcharge front. And the income disparity seems to be only widening with the rich getting richer and the poor getting poorer. Consider: Indians on the Forbes Billionaire list is getting longer. Why, because it is these rich businessmen who have benefited from the finance minister's sops doled out to them from time to time. These entrepreneurs could have been provided with opportunities to contribute more to the exchequer. They could be made to bring in the revenues either through market capitalisation under the wealth tax net or, by prescribing to one or more income tax slabs of 40 per cent for those with incomes more than Rs 5 to 10 lakhs. But, our finance ministers have badly failed on this front.

Industry not burdened
Indian industry seems to have pulled out of recessionary conditions which is reflected in the higher cash profits. Though the budget increased the income surcharge from 10 to 15 per cent, no corresponding measure has been taken for corporate India. The finance minister was expected to do away with several exemptions and deductions and also to raise the average corporate tax yield of 20 per cent to at least 25 per cent. But, surprisingly MAT has been reduced from 10.5 to 7.5 per cent. The two per cent tax collected by banks and financial institutions has also been abolished. So then, the government's additional revenue mobilisation effort will only bring in around Rs 6,904 crore which is far lower than last year's collection of Rs 9,479 crore. It is not that the finance minister is very happy about this measure. He could not have taxed the common man by raising the prices of cooking gas and kerosene which have a multi-level effect. Not only does it spiral inflation, but overall income levels also fall which inturn drastically reduces the standard of living of the masses. In such a situation then, what could be the best defense that the finance minister put forth to explain all the steps taken by the ministry towards reducing poverty in the country.

It is a Catch-22 situation that the Government of India finds itself in. It wants to prune expenditure but it cannot do so at the cost of the poor man. It is in dilemma as to whom should he make happy? A look at the Union Cabinet shows that far too many ministers constitute the Cabinet. Much as the government wants to cut the flab from the Cabinet, its intent so far has only remained on paper. Statistics reveal that this year the bureaucracy has swollen by 90,000 people. Even the Fifth Pay Commission has recommended pruning some government departments. But, all such suggestions have been water on duck's back.

On the reverse, more and more cabinet and secretarial posts are being created. Reduce subsidy on fertilisers and make public distribution system (PDS) more expensive. It is justifiable to make PDS available exclusively for the masses. Let the rich not avail of PDS. But, it is no way justifiable that in one stroke PDS prices for essential food items such as rice and wheat are increased by 68 and 87 per cent, respectively. This is irrational because the 35 crore people still living below the poverty line even today cannot afford to buy foodgrains at the old PDS prices! Such is the pathetic condition even after 51 years of achieving independence and 11 years of liberalisation. What sense then does it make to say this strata of society will be provided double the quantity of the items than was being provided before. It appears to be a big joke that the government is playing on the poor.

Consider another injustice by the government. It looks like the finance minister is aware of the fact that cotton is the most favoured affordable fabric of the poor. Hence, increasing the excise duty on cotton will only affect the weaker sections of society. Also, provident fund savings is the only source of retirement benefit that the poor have. Hence, by lowering the PF rate by a whole one per cent to 11 per cent was very shocking especially when this will only benefit the affluent sections of society. In the US after retirement a person draws pension of $780 per month. Whereas in India the government has its eye on the meagre retirement savings of the people.

Subsidies ill-targeted
The Indian Government means well. Existence of PDS, subsidies are on paper meant for the deprived sections of society. But what India lacks is a proper end use criteria methodology resulting in subsidies going as a criminal waste because targeting is absent and those who benefit are the richer farmers who enjoy political clout.

India is famous for its blackmarketing and red tapism.In every quarter corruption exists which only deters the situation further of the poor. This is more common in rural areas where the literacy levels are below par and farmers many a times are not aware of their benefits. Many state governments do have that feeling for the poor and are not interested in implementing the pro-poor programme which they personally feel are a sheer waste. Even today there are instances of starvation deaths which the government very point blankly denies. The infant mortality rate in rural areas is still high as 700 per every thousand. It is estimated that more than 40 million people still go to bed hungry every night.

What will happen in the long run to the Indian farmer if import tariffs come in? Where will they go to earn a livelihood? What will happen to the revenue coffers of the government which are dependent on this source? What has globalisation done?

Has globalisation and liberalisation improved India's poverty structure or are we worse off today.

There is no doubt that India needs economic reforms to keep pace with the world but what reforms lack is a focus on human social development. Just increasing GDP and boosting trade will not help in improving the living standards.

Take a look at what reforms have done? India initiated reforms way back in 1991 and we got independence more than 52 years ago still today there are more than 100 million families who have no source of drinking water, about 150 families without electricity and millions more without education and healthy facilities. If the government cannot do anything big it should atleast reduce the extent of exploitation of the poor by the rich pradhans in rural areas.

The government should try and change the mind set of its ministers and go on an exercise wherein upliftment of the downtrodden is on top of the charts. Globalisation improves to certain extent of the health of the economy but together with it it also breeds some amount of frustration in the minds of the people.

Is India better off or worse off than 1991? Many argue that level of poverty is higher now, than in the past. Planning Commission says that rural poverty has in fact increased during 1990-97.