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Mainstream, VOL LI, No 12, March 9, 2013

When Budgets are Made by Politicians, they become Missed Opportunities

Sunday 10 March 2013, by T J S George



There is an accepted way to handle Budgets —and there is the Indian way. Our Budgets are the handiwork of politicians, not financial experts or railway specialists. They do not seek long-term plans aimed at public good. Some Ministers are smart and some are naive, but all focus on short-term advantages. Budgets are, year after year, our country’s biggest missed opportunities.

Consider Railway Minister Bansal’s perfor-mance. This was his maiden Budget, the first time in his career that he was the cynosure of all eyes. It was a good opportunity to show a whiff of wisdom, a touch of leadership. But what did he do? He proved that his priority was to please his boss. He went out of his way to say that Rajiv Gandhi had introduced him to the most sacred temple of democracy, that Rajiv Gandhi had turned India into a giant in information technology.

In a laboured effort to relate this to his portfolio, he said that information technology had benefited Railways also. How sad can our politics get.

Actually it can get sadder. Bansal did not stop with the icon of the ruling Congress dynasty. He saw to it that the Budget paid special attention to Sonia Gandhi’s constituency, making Opposition members mock him by calling it a Rae Bareli Budget. As for the general public, the naive Minister let Rail Bhavan bureaucrats to trick them. They ruled out fare increase and announced price increase; all surcharges, like reservations, were up. It was like saying there was no robbery, only burglary.

The likes of P. Chidambaram won’t do any-thing so amateurish. They are more wordly-wise, but the ground rules are the same: tributes to the bosses, a feel-good feeling to the masses. With elections getting closer, he was politically correct and did some gallery play. Who wouldn’t love a bank exclusively for women? Even Sushma Swaraj put on a beatific smile as she thumped the desk. A “Nirbhaya” fund for women, tax increase, apologetic and nominal, for the super-rich, concessions, condescending and nominal, for the super-poor—Chidambaram did succeed in presenting a glass half-full.

But where was the vision, the change of direction? High prices have been the biggest problem for ordinary people in recent months. Where was the solution? This Budget will not go into the history books as a few have. Chidambaram’s own 1997 Budget was called a “Dream Budget” for the way it reduced taxes and increased revenue. Yashwant Sinha’s Budget in 2000 was called the “Millennium Budget” because of its timing. The “Epochal Budget” deserved the name because it referred to the 1991 Manmohan Singh Budget that implemented Nara-simha Rao’s vision of economic liberalisation.

The best Budget-makers were in the early years of independence. Shanmukham Chetty and John Matthai were path-breakers, but too professional to fit into Jawaharlal Nehru’s then-popular socialistic pattern of life. C.D. Deshmuh and T.T. Krishnamachari who followed them became known as the men who shaped new India’s economy. Deshmukh was an ICS officer and the first Indian Governor of the Reserve Bank. His vision included social control of the financial sector. TTK, an industrialist himself, was criticised by many business leaders for his penchant for controls and taxation.

With Morarji Desai in 1958 began the era of truly unpopular Budgets. Yet he created a record of sorts by presenting ten of them in his career.

The culture of Budgets—as the culture of politics itself—changed with Indira Gandhi. Even TTK and Morarji Desai had the freedom to chart economic policies largely in line with their convictions. Today Congress Ministers have to fit their policy ideas into the larger rubric of dynasty politics. They must also submit to powerful corporate cronies. Pranab Mukherji’s term was marred by their influence, and Chidambaram is known to have his own crony

capitalists. He has an additional pressure: the ambition to become Sonia Gandhi’s next choice for Prime Ministership. Concluding his Budget speech, Chidambaram said we were one of the world’s biggest economies and that we could become bigger and still bigger; it all depended on us.

‘Us’ of course meant ‘them’. And that is the problem.

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