Business Today Editor Chaitanya Kalbag on Budget

Budget marked by sops, not substance, says BT editor
Far away in Los Angeles, The King's Speech won four Oscars, including Best Picture and Best Actor, just as Pranab Mukherjee rose to present the Union Budget for 2011-12 in Parliament.

The finance minister spoke for 110 minutes, but certainly does not win any prizes for dramatically pushing India's reforms into a new geostationary orbit. Worse, the fiscal deficit is projected at 4.6 per cent in 2011-12 after 5.1 per cent in 2010-11, and going down to 3.5 per cent in UPA II's final year in power.

If anything, there was little booster fuel added to the country's rockets. We expected a lot, but aside from homilies on corruption, governance and "growing aspirations of a young India", and "I see the Budget for 2011-12 as a transition towards more transparent and result-oriented economic management system in India", we were left thirsting for more.

Yes, the markets rose on equities-related news, but there had been too much holding of breath in the past few weeks.  Foreigners will be allowed to invest in Indian mutual funds. The ceiling for FIIs to invest in corporate bonds has been raised to $40 billion, with a three-year lock-in for unlisted corporate bonds. There were sops galore for states going to the polls later this year, particularly Kerala, West Bengal and Tamil Nadu, plus a number of smallish outlays that aim to improve the food-supply situation and alleviate crippling food-price inflation.

Many of the outlays total Rs 300 crore, and nobody laughed when the Finance Minister became facetious: "Hon'ble Members may be curious as to why all these new initiatives are being launched with an allocation of Rs 300 crore.  Well, the number 3 happens to be my lucky number."  Well, you can't really say that about Pranab's Budget No. 3.