The real reason most people are upset is because they expected exemptions and those aren’t there, not beyond extensions of some that already exist. Exemptions and special dispensations are antithetical to a tax-reform agenda and in the elimination of FBT and CTT, surcharge removal for personal income taxation and investment-linked exemptions for companies, we do have movement towards standardisation and harmonisation. How does one justify exemption for housing as opposed to health or education? And if one wants GST from April 2010, with a Central rate of 8 per cent, we do need Central excise to increase and more service sectors brought in (such as legal consultancy). The deduction for electoral trusts is also the beginning of a good thing. Some tax reform is indeed contingent on the 13th Finance Commission recommendations. (Revenue neutrality of direct tax proposals seems dicey though.) Finally, if employment exchanges are privatised (state governments permitting) that wouldn’t be a bad idea either.

I am glad the Budget isn’t flashy and spectacular. It seems pedestrian. But given the constraints, it isn’t quite that. I am glad capital markets and the chambers aren’t applauding. It is the kind of Budget we deserved and it is also probably the kind of Budget that’s good for the economy. Despite public expenditure and the doubtful efficacy of Central universities in every state, there is nothing to kill green shoots.

The writer is a Delhi-based economist express@expressindia.com