Mr Santa Claus Mukherjee

With the 2010-11 Budget document, Pranab Mukherjee seems to have goodies for all. But does he?

Dear Pranab Babu,

You must be a very satisfied man now, having delivered a Budget which few have been able to find fault with. In fact, that perpetual bugbear of finance ministers, the stockmarkets, have also given a resounding thumbs-up to your 2010-11 Budget document. A 175-point upmove in the BSE Sensex on Budget day surely isn’t a mean feat in these treacherous times.

And why, sir, should you not be satisfied? As a friend of mine who is CEO of a top broking firm told me, your biggest gift to the people this year was the absence of any negative surprises. Long used to being battered by budgets springing nasty news on them, this was enough to make Indian business leaders and financial markets sing hallelujahs this time round. And your feat of keeping the fiscal deficit numbers in check did the trick for them.

I am sure this year you were particularly relieved at not having to keep in mind your friends in the Left parties when you and your fine set of officers were framing the Budget proposals. I know you get along fine with the Left, and they know you very well thanks to the fact that they hold the reins of power in your home state. But you know only too well that when it comes to economic policy, they are tough nuts to get around. So this year, you just went ahead and did what you thought was best.

It was, therefore, understandable that you announced a higher target for disinvestment for FY11, what you call ‘people’s ownership of PSUs’. A target of Rs 40,000 crore in one year is no mean one. The Left may cringe, but this is an aggressive task you have set for yourself against the background of unpredictable markets. But it seems you have your gameplan all worked out.

Then, there’s that other big step you’ve announced: that of new bank licences to private sector players, something which has been anathema thus far to the banking regulator after successive banking-stock market scandals. This must surely be good news for a number of corporate houses and finance companies, and the Reserve Bank Governor must be ready for a queue outside his office pretty soon. A couple of large industrial houses that have been waiting for years must be truly delighted. And knowing you and the RBI, I am sure you will insist on having the checks and balances all drawn up before this new policy is unveiled.

We did get the common thread of this Budget when you were speaking: inclusive growth will top your agenda. And your 2010-11 document does deliver on that count. Rural infrastructure, health, education, financial inclusion, affordable housing, micro, small and medium enterprises, your Budget has something for all of these. But your biggest gift for the aam aadmi, the restructuring of income tax slabs, has certainly brought a lot of cheer and will win you a number of new friends, irrespective of which side of the political divide they are on.

Your several friends in corporate India will also be happy that you’ve given them something to smile about by reducing the 10 per cent surcharge on domestic companies to 7.5 per cent, though you’ve increased Mat (Minimum Alternate Tax) from 15 per cent to 18 per cent. Doesn’t matter. On balance, they’re still happy.

Sir, you’ve made no bones about the intended beneficiaries of this year’s Budget. You made it amply clear in your speech that this Budget is for the aam aadmi, a term you used more than once in your speech. “It belongs to the farmer, the agriculturist, the entrepreneur and the investor,” you said. You’ve said you place your faith in the hands of the people, who you say can be depended upon to rise to any occasion in national interest.

Now, perhaps, is the time when the large majority of Indians will need to be brought into the purview of the economic growth that you have so ambitiously set out to achieve in the course of the next few years: crossing the ‘double digit growth barrier’.

As for me, sir, I will have to drop my plan of buying a new car. And, to use a pun, in the ‘fitness’ of things, I will consider cycling to work and save on petrol costs, now that even superstars like Salman Khan have shown the way. On the way home, perhaps I’ll pick up a balloon for the wife. You’ve kindly exempted that fully from central excise duty.

Yours sincerely.

These are the author’s personal views.

Budget 2010-11financePranab Mukherjee