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| UPA’s interim, last budget | | |
There is something common in the opposition reaction when budget are presented. If the budget has concessions and sops it is called as a political lollipop if it takes strong measures of austerity it is called as depressing and uninspiring. Reactions to the interim budget of UPA government were on similar lines but economists and academicians put in the right perspective. As Prof Nisar Ali, an economist told this newspaper that nothing much should be expected from an interim budget as a full budget will come three months later, the senior Minister of UPA Pranab Mukherjee seems to have acted with balance and as per convention. Though technically nothing could stop the government from announcing some major sops, it refrained from doing so as it would have been improper for an outgoing government. Since a new parliament will be in place in another three months or so, Mukherjee, in his speech concentrated more on the achievement of the UPA government in the last five years and the present challenges. His presentation did highlight the difficult time the country is going through and also admitted that all the financial austerity measures the government promised last year could not be met. The government’s total expenditure for 2008-09, for example, will shoot up to Rs 9,00,953 crore and it will be Rs 1,50,069 crore more than the revised estimate. Since the revenue for the year is going to fall short of the expected level, mainly due to lower tax collection on account of recession, the fiscal deficit for the year 2008-09 will touch a record 6 per cent from the target of 2.5 per cent. Following the government’s overall strategy of boosting demand for the revival of the economy, Mukherjee budgeted huge increases in expenses in the next fiscal year on several accounts. To provide more jobs and lift the economy, the interim budget for 2009-10 has planned a total expenditure of Rs 9,53,231 crore. To help exporters in view of the global economic crisis, it proposed interest subvention of 2 per cent. Schemes like the National Rural Employment Guarantee Scheme and the Bharat Nirman got a massive injection of funds in the coming fiscal. The objective was to infuse huge spending on infrastructure development for contra-cyclical measures. Allocation for Defence was increased in a big way to Rs 1,41,703 crore which includes Rs 54,824 for capital expenditure. Mukherjee’s interim budget also warns that the next fiscal will be equally difficult for the economy and the fiscal deficit will continue to remain high at 5.5 per cent. The subsidy bill for the current year will also be steep as turmoil in global commodity markets is likely to push the country’s subsidy bill up by over 80 per cent to an all-time high of Rs 1,29,000 crore. The major contributors to this are fertiliser, food grains and oil products. The incoming government after the elections will have a tough job on hand.
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