- P. Chidambaram Budget 2014: 7 crucial economic initiativesP. Chidambaram slams Budget 2014 critics, says saved Indian economyIndian economy still stuck in a rut over weak consumption, stalled investments: HSBCAt G-20 meet, Wolfgang Schaeuble blames Indian economy's growth woes on internal issues
economy for two reasons. One, its provisions will be effective only for a few months and second and more important, Indian economy is driven to the current status as a cumulative effect of the past few years of political arrogance and economic mismanagement. Given the situation of inflationary recession, twin deficits, corruption and paralysis, even a full-fledged Budget could have hardly done much, leave alone an interim one seeking Vote-on-Account. So, what next?
If RBI refuses to fall in sync with the finance ministry, government can buy back bonds, thereby reducing their own debt and interest obligation and also pushing the required liquidity into the system. The next Budget, post-elections, must get cracking on subsidy-reduction, infrastructure-building, tax rationalisation and other things that rulers are wary of doing close to elections. The next government with elections five years away can and must really do stunning things for the economy.
The author is faculty of economics in SIMS, Symbiosis International University, Pune.