As Finance Minister Arun Jaitley gets set to unveil Union Budget 2015 on Saturday, he has almost everything working in his favour, making him the most fortunate FM in Indian history. Here are some reasons why:
1. Rail budget is balance of pragmatism and populism – with the latter at the minimum – giving the FM a huge boost to eye alternatives that have been unexplored for long and disappoint those expecting handouts, which is diametrically opposite of what happened during the UPA regime.
2. Economic survey has put Indian economy in sweet spot:
* Inflation seen at 5.5.5%
* Commodity prices, like oil are down 60 pct and even gold is behaving
* Sensex has risen over 4400 pts since PM Narendra Modi took over
* Fiscal deficit at 4.1%
3. This strong foundation gives FM the leeway to launch economic reforms like those by Manmohan Ingh 19191-92, P Chidambaram in 1997-98 and Yashwant Sinha in 2000-01.
4. Rupee has stopped its yo-yo ride and inflation is down by half and more and above all, the US economy is strong – while that may hurt the foreign inflows it will definitely help Indian exporters
5. Arun Jaitley is the first FM since 1984 whose political party has the mammoth mandate to push through standout economic reforms. He can now axe subsidies on diesel, kerosene, fertiliser, LPG and more, giving the govt a much more leaner and, if possible, meaner profile. He can even target Labour reforms, which are a crying need and which India In has been screaming about for decades.
6. There is a political angle to the Budget equation too, a very pressing one, indeed. That the BJP was drubbed by the Arvind Kejriwal led AAP in Delhi Assembly elections. With the Bihar elections in the offing, the BJP power brokers don’t want another fiasco. The good thing is that apart from Bihar there are almost no other major elections coming – a big blessing indeed.
7. That the economic foundation is strong has already been factored in by the markets which have risen strongly on Economic survey day by as much as 473.47 pts to near all-time high of 29220.12 pts – albeit a minor hiccup on the way that happened on Rail Budget day.
They, like most of India, await a Big Bang Budget.
Expectations are that Arun Jaitley will build on that solid foundation and unveil a Union Budget that is both tough and yet put more money in the pockets of the common man as well as the middle class to kick-start a consumer-spending led boom that will cheer India Inc as well as encourage them to stop their reluctance to spend on ramping up their infrastructure that will in itself create jobs and power PM Narendra Modi’s ‘Make in India’ programme, not to mention, get the Indian economy humming again.
Go for it FM Arun Jaitley.