Yes, 6.8 per cent is bad, but we knew numbers would be bad. We knew FRBM had been diluted. We knew state government contribution to deficit would increase to 4 per cent (as share of gross state domestic product). With off-budget items included, this is perilous. But this was known and there almost seemed to be a national consensus that deficits were a good thing. So what are we upset about now? Perhaps the fact that while disinvestment has been mentioned, there is no specific target and this could have been used to make numbers more respectable. Instead, there is a tribute to bank nationalisation, and 51 per cent government equity retention in PSUs is mentioned. We knew strategic sales were out. We knew there would be minority (say 10 per cent) sales of equity and we also knew even this would run into a tangle. There would be disputes about whether the timing was right and whether profit-making PSUs should be sold. Having said this, is it tactically better to have a song and dance in the budget speech about disinvestment and take credit for numbers (which then runs into controversies) or do it quietly later (if at all possible)? Pranab Mukherjee has probably been wise in opting for the latter, including non-mention of auction of 3G spectrum. Notwithstanding hubs in Tamil Nadu and West Bengal, there are the DMK and the Trinamool to reckon with.

Were we expecting big-bang reform announcements, as has often been the practice in budget speeches since 1991? The budget speech may then warrant 9/10 by the chambers, but these promises often amount to nothing. Why mention FDI in telecom or civil aviation or opening up of pensions and insurance? It is far better to leave petroleum product pricing (including targeting of subsidies) to the ministry of petroleum and natural gas or convergence to the ministry of rural development. Having said this, there is some attempt to target subsidies, not so much through Unique Identification of India (we still don’t know how this meshes with other cards like MNIC), but through nutrient-based fertiliser subsidies and PMAGY (Pradhan Mantri Adarsh Gram Yojana). The last can geographically target cross-subsidisation. However, do we mean villages where 50 per cent of the population is SC (as stated in the speech) or do we mean villages where 50 per cent is ST? The background is a situation where we still can’t agree on a definition of BPL (below poverty line), the rural development ministry believing it to be double the Planning Commission’s figures.

... contd.