Yashwant Sinha budgeted for Rs 21,640 crore, less than last year's collections. The reckoning is that collections upto November this fiscal have touched Rs 33,000 crore. These will burgeon in the next four months, as UTI releases repurchase funds to Unit '64 sellers. (Even to this day, repurchases of Unit '64 made in mid-October have not been paid for). At first sight, it may appear that the surge in small savings should help to cover the centre's fiscal deficit. However, that is not so.

Three-fourths of the collections are transferred to the states as loans. While this increases the centre's outgo, the transfer actually finances the fiscal deficit of thestates! To this extent, the states' fiscal deficit enters the centre's budget. So, Sinha deliberately underestimated small savings to window-dress the fiscal deficit. The actual deficit is slated to overshoot the budget target of 5.8 per cent of GDP for other reasons as well. The PSU equity disinvestment of Rs 5,000 crore is still chancy.

More serious is the shortfall in revenue collections, especially from excise duties. Modvat claims are inflated by passing on the exemption due to small industry to others. The failure of the state to collect taxes is stark. The only mitigating factor is that industrial growth has been unduly small; but this also reflects the failure to ginger up faltering investment. The roses Sinha had expected to bloom in September are nowhere in sight even in December. His Samadhan has bombed. Against Rs 52,000 crore clogged by litigation, estimated payments have been just Rs 400 crore. Samadhan was flawed. Tax demands were challenged because they were considered unfair. Why shouldlitigants hurry to settle cases out of court? Besides, in these hard times, few corporates can be expected to pay up to buy peace; the consequent tax outgo would squeeze out thin profits.

It would have been a different matter if Sinha were a tough finance minister. He is not. He pandered to numerous lobbies with roll-backs. He is unable to enforce taxes. He has been playing with numbers during an on-going recession, displaying a rare lack of understanding of economic forces. Finance ministers should be made of sterner stuff.