When tax collections are buoyant, what does an FM constrained from announcing bold policy measures by his coalition partners, do? Makes bold outlays, encourages consumption demand and hopes investment will take care of itself. That is what this budget seems to have done, missing for yet another time, an opportunity to make bold policy changes. It is with that stroke of resource allocation that the budget sweeps most sectors that actually cry for policy reforms.

Everyone knew that this budget will have an eye on the election. One would have thought that ‘inclusive growth’ would be at the core of policy - including those that have been left out of the growth story, and providing a supply-side fillip that only government can provide. In agriculture what was needed was the encouragement of investment in a range of areas from soil, irrigation, to seeds, fertiliser and marketing. The sector has suffered productivity losses for deteriorating soil quality, aggravated by misuse of subsidised fertiliser. The loan waiver is a short term soothing measure, and insurance is a smaller sop. It is investment that this sector badly needs, to do at least half as well as the other sectors in the economy.

Industry has lesser to complain, what with an across the board excise cut. But this sector also needs an investment fillip. We have built a strong world-class base and now is the time to expand capacity. The policy makers’ silence on infrastructure, labour policy, foreign capital, and investment, an opportunity to actually create resilience against the US slowdown, has been lost. It is left to the industry to fend for itself. The budget however manages to shift the burden of carrying forward the growth story, to the consumers. The reduction in personal tax rates will place more money in the hands of consumers, who will be the growth drivers.

... contd.