Union Budget: PC fails to mop up fresh funds in constrained economy

Union Budget: PC fails to mop up fresh funds in constrained economy

“Forget a dream budget, it is not even a Chidambaram-like budget. The aura that surrounds Chidambaram is just not there.”

This was generally the reaction to the eighth budget the dhoti-clad finance minister presented on Thursday.  Perhaps, the finance minister did not have an alternative as his hands were tied, despite the fact that he was embarking on the last budget of the UPA-2 government before facing elections in 2014.

Facing a growth rate that is just not encouraging – even as he completed the speech in came the news that the last quarter growth figure was a mere 4.5 per cent – Chidambaram had to make do without going in for populist schemes. Nor could he dare impose harsh tax measures on any section, be it individual salary earning member or the industry. It would neither have been politically advisable nor economically feasible.

That he levied a surcharge for the year on the super rich was only a token.  Thus, in an already “constrained economy”- to borrow his words from the budget speech – he could not go in to mop up fresh resources (in the first nine months of the last year, the central excise collection is said to have fallen by 16 per cent, making it impossible to look for an increase in the tax revenues or curbing his intent to spend on any sector.)

So, naturally, there were no extra funds to spend on populist schemes.  Thus, if the budget lacked that “punch”, Chidambaram would plead he is not to be blamed. His budget reflected that “you have to live in hope, that things will improve, that sunny days will come”. Be it tax proposals or outlays to key sectors, it was more or less status quo.  Surprisingly, BJP leader and Leader of Opposition in Rajya Sabha Arun Jaitley all but bailed out his colleague in the legal fraternity : “First put, the economy is in distress; then a helpless finance minister comes out with a budget in which he had very little elbow space.”

That there was nothing for the private sector to rejoice was shown through sensex tanking by nearly 300 points. In the past, the private sector was eagerly waiting for a Chidambaram budget. But this year, the fizz was lacking even before the budget. Justifiably, the corporate world which used to be gung ho in the run up to the “Chidu budget” was not enamoured after the budget.

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