It is often said that ‘No news is good news’. Extending that logic, ‘No bad news is great news’! That’s the sense one got listening to Pranab babu’s Budget speech. The ground had been well and truly laid for excise duty and service tax to revert to pre-crisis levels, something that even the harshest critics had come to accept as a fait accompli. With inflation refusing to go away and the spectre of oil prices completely out of control, nobody was expecting freebies of any kind, state elections notwithstanding. Yet, the seasoned and pragmatic finance minister has delivered a few surprises, of the pleasant kind!
Apart from the tax proposals, he has indicated that a number of legislative actions, particularly in the area of financial sector reform, would be forthcoming. Many of these, relating to insurance, banking and pension reforms, have been on the backburner for too long and one hopes that they will finally see the light of day. The decision to permit foreigners to invest in Indian mutual funds, as well as the increase in the limits for FII investment in corporate debt, are both very welcome. The proposal to introduce a national manufacturing policy is particularly noteworthy. The increase in allocation for skill development through the Centre’s programmes, the green-friendly initiatives and the increase in the weighted deduction for R&D expenditure from 175% to 200% are all steps in the right direction.
I have long believed that the FM’s job is one of the least enviable jobs going in the country. No matter what he does, he can never please everyone. On top of that, there are electoral compulsions, special interest lobbies, 24/7 media analysis and above all, the need to keep the wheels of the economy rolling smoothly. Must be the world’s toughest juggling act. The cliché goes that the devil is in the details and one hopes that there won’t be too many nasty surprises as the experts dive into the fine print. The other big worry is in terms of implementation. We have traditionally been very good with budget outlays but terrible in terms of budget outcomes. Hopefully, it will be different this time around.