Politicians, Common man and the Budget

By: Radha Radhakrishnan
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Pranab Mukherjee
Populist budgets are nothing new when elections are round the corner, particularly when a political party is eying to grab power in three states that is going for polls this year (2011). West Bengal, Kerala and Tamil Nadu will go to polls this year to choose a new government in the state. In two of these three states, West Bengal and Tamil Nadu, the Congress party has been desperate to break the jinx of not being able to form a government for decades and in Kerala it is fancying all chances of coming to power with the support of its allies in United Democratic Front (UDF).

View the budget from this point of view and you will see populism all the way... Consider some of the initiatives below:

  • Special grant of Rs 1000 million to Kerala veterinary university
  • Special grant of Rs 2000 million to Indian Institute of Technology, Kharagpur
  • Special grant of Rs 200 million to Indian Institute of Management, Kolkata
  • Special grant of Rs 100 million to Madras School of Economy

Finance Minister's comrade from his home state Ms Mamata Banerjee put more trains on track to West Bengal with an eye on elections, Mr Pranab Mukherjee has shown what he too can do to the development of his state as Union Finance Minister. Difficult to say who is the winner between Ms Banerjee Vs Mr Mukherjee!

Of course, the markets seem to have taken the budget positively. Probably the first time markets have gone up in the last half a dozen years. Markets seem to like the intent of the Government of broad, macro development. Key sectors like Infrastructure and Farm Sector have received adequate and right focus. Government seems to be keen on pegging inflation to pre-economic crises levels which is also a welcome. Finance Minister has indicated improving supply response of agriculture to the expanding domestic demand and through stronger fiscal consolidation.

What I like in the budget is acknowledging two important topics that have hogged all the limelight in recent times – Food inflation and corruption (read: absolute lack of governance). The Budget probably for the first time acknowledges Corruption is a problem and has to be fought collective. Government has to improve the regulatory standards and administrative practices.

Similarly, to curb food inflation budget has laid out several projects, initiatives and programmes to stem it with a clear focus on removal of production and distribution bottlenecks for items like fruits and vegetables, milk, meat, poultry and fish.

Over the years budgets always lay out noble and glorious intentions but very often lack conviction and action. Hope the 2011-12 budget does see all the grand programmes and initiatives being implemented successfully. That"s where the real victory for both political parties and the common man lie.

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