Saturday, March 01, 2008

Budget 2008- a not so aam budget

Mr.Chidambaram take a bow. He has shown how to practice the art inclusive politics. The FM has somehow successfully managed to bring a feel good atmosphere both economically as well as politically.

Budget 2008 will be remembered as a master stroke which left both the opposition and the supporters in awe. The Harvard educated
Chidambaram was not only able to present a populist-election oriented budget but he was also successful in providing the impetus that the economy was searching for in view of the recent slow down that the market as a whole is witnessing.

The Rs. 60,000 crores waiver to the farmers that has been termed as the mother of all waiver is a bold step which can be termed as an action that owes its birth to compassion and to the impeding general elections.

Critics are already out with some of them suggesting that financial institutions will get a rude shock as they will have to write off the loan-waiver but then when you consider the plight of the crores of farmers that are in debts, debt that has already resulted in suicidal-deaths of so many farmers then it doesn’t look that bad decision.

Banks will surely and gradually recover, but if the waiver was not given then it would have resulted in more deaths in a country where 65% of the population is still engaged in agriculture as a source of livelihood.

The burgeoning Middle class has been given more than expected tax-relief and that will come as good news for crores of the common Indian. The Budget 2008 has been successful in attaining the fusion of growth, social justice and providing middle class more cash thereby increasing the purchasing power which will ultimately lead to growth in the economy.

Tiger conservation which doesn’t have enough power to influence the voting bank politics was also given its due attention as a one time grant of Rs 50 crores was made to National Tiger conservation authority. The fund will primarily be used to raise an armed tribal protection force to guard tigers. This is above the 600 crores plan which the cabinet had cleared earlier to help relocate displaced people from protected zones.

The protection force will have staff that will be made up of the local tribal population that inhabit the forest. This way the twin-objective of upliftment of the tribals and protection of wildlife both will be achieved.

Increase of allocation has also been announced in safe drinking water programs, national highway development program and minorities upliftment which saw a whooping allocation of 1000 crores.

34,440 crores has been kept aside for developing the all important Education sector.
The FM should also be applauded for increasing the allocated sum on internal security from 17674 crores to 21715 crores. This was necessary in view of the increased naxal activities in the country.

In my earlier articles I have suggested that Rahul Gandhi's pet program, the NREGA should have been more carefully handled and a policy of selective implementation should have been followed. Budget 2008 has proposed a hike of 4000 crores for NREGA and the program is now expected to be extended to all the districts of the country. This is a good step as now every district will be given its due share, though I still would have been more happy if preferential treatment was accorded to those part of the states that are more poor.

The medical and health sector also saw a boost with the excise duty being reduced to 8% on all drugs. This will result in prices of essential life saving drugs coming down. Tourism sector too had something to cheer about as 5 years tax-holidays was announced to upcoming future hotels in selected areas. Tourism and allied sectors are sure to witness a huge boom especially considering the Commonwealth game which is scheduled for 2010 .

Planned expenditure on sports was also increased to 781 crores. Although it will not be wrong to say that more allocation would have been welcomed considering the stagnation that sports in India is facing.

Small cars, hybrid vehicles, scooters became cheaper which will further augment well for the Aam-admi.

The Aam-admi which is regarded as UPAs punch-line will sure gain more acceptability among the common-man simply because now more people are aware of how will the budget 2008 affects them and the growing media in local languages sees to it that even a rural Indian knows how the government plans to use his money. And these things do play in the minds of voters when the time comes.

Also, while Chidambaram was announcing the sops, not very far from the parliament Congress was requesting Supreme courts permission to resume dredging of the Ram Setu. It seems even Ram was forgotten in the hullabaloo that the budget generated and now it remains to be seen when will the opposition smell the rat.

History suggests that populist budget have rarely proved a sure shot method of being reelected to power. It may happen that Congress will be routed out in the next general elections but still the budget 2008 will go down in history as a budget which was almost perfect if not fully perfect in the utopian sense.

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