Budget targets politics & progress: Moody’s

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Global rating agency Moody's Investors' Services said Budget 2008-09 has tried to balance the short-term political compulsions in the run up to national elections with long-term developmental needs.

"Budget 2008-09 tenuously balance short-term political imperatives with long-term developmental needs, while also trying to be consistent with key fiscal targets set forth in the Fiscal Responsibility and Budget Management Act," it said.

With the loan waiver of Rs 60,000 crore for the farmers in the Budget, the finance minister has focused on poor, less educated rural dwellers. This should boost agricultural incomes in a relatively in-expensive fashion, and at a politically expedient time, Moody's said.

The budget, being the fifth and the final of the Congress- led UPA government, was expected to lower the fiscal and revenue deficit of the country as proposed under the Fiscal Responsibility and Budget Management Act (FRBMA) legislation.

"The budget is also particularly interesting as it marks not only the last for the Congress-led United Progressive Alliance government, which is serving its final year, but also because it comes in the terminal year of the FRBMA," Moody's Vice President Aninda Mitra said.

FRBMA provides a legal and institutional framework to bring down the fiscal deficit and contain the growth of public debt.