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 | Reforms: Survey proposes, Budget disposes Our Correspondent Finance Minister Pranab Mukherjee has squandered an excellent opportunity to re-energize the economy, speed up liberalization, and embark on the gigantic task of fiscal consolidation. The opportunity was provided by the exit of the Left from the national scene, the demoralization of the Bharatiya Janata Party, the surge of confidence in the Congress, and the relative marginalization of allies. The stage was set for big-bang reforms—at least, for some meaningful changes in the policy framework, if not spectacular announcements, was in the realm of possibility. Nothing of the sort happened, though. Unwillingness to make any novel change is as inexcusable as it is inexplicable. Take the case of privatization of public sector undertakings (PSUs). Terming these as “the wealth of the nation,” the Finance Minister wants that “this wealth should rest in the hands of the people.” He practically ruled out the strategic sale of PSUs. He said, “While retaining at least 51 per cent Government equity in our enterprises, I propose to encourage people’s participation in our disinvestment programme.” There is no reason why a vigorous privatization programme could not be carried out. For the DMK and the Trinamool Congress, the two prominent constituents of the United Progressive Alliance (UPA) opposing disinvestment, were also part of the government led by Atal Bihari Vajpayee (1998-2004); they did not stall privatization then, and there is no valid reason why they should do it now. While there has been considerable diffidence to expedite reforms, there was a corresponding, concomitant zeal to widen and intensify populist programmes. The most notorious of these, the National Rural Employment Guarantee Act, got another fillip, as its allocation shot up to Rs 39,100 crore for the year 2009-10, an unpardonable 144 per cent hike over the 2008-09 Budget Estimates. We say unpardonable because such schemes not only make serfs out of free citizens but also burden the public exchequer. Unsurprisingly, fiscal deficit has zoomed to 6.8 per cent. Such unlovely numbers are not cherished by the markets, which gave a thumbs-down to Mukherjee’s Budget. It is not just the investor on Dalal Street who suffered; the man on the street, too, has been disappointed, as there has been very little relief in terms of income-tax slabs. Political managers rather than sensible economists have determined the basic features of the Budget. This is despite the fact that general elections are five years away. Yet, the UPA regime has failed to take cognizance of the fiscal figures. Timidity seems to have become the second nature of the political class. Posted on : 7/7/2009 Mail this article to your friend |