In a closed-door meeting with Finance Minister Pranab Mukherjee ahead of the Union Budget for 2009-10, Anand Mahindra, vice chairman and managing director of Mahindra & Mahindra Ltd, one of the largest manufacturers in India, said the annual exercise was increasingly being viewed as a ritual than as a policy document. But, this year for a change, Mahindra said the industry was looking to the finance minister for more reasons than one.

Not only have companies’ profits been dented, in some cases — for instance, ICICI Bank, the country’s largest private bank — the global slowdown has prompted a serious introspection. The corporate sector is just one wheel of the juggernaut that the Indian economy is. The labour market is equally stressed given the enormous job losses in manufacturing, especially in the export-driven sectors. Bad infrastructure — social and physical — deteriorating governance in terms of delivery of public goods and services, the worsening fiscal situation and, to top it, lingering worries of a bad monsoon, call for strong economic leadership. Everyone is counting on the trio of Prime Minister Manmohan Singh, Mukherjee and Deputy Chairman of Planning Commission Montek Singh Ahluwalia to get their act together, if not for anything else, but to at least set the development agenda for the next five years. The Budget is a natural starting point, being the first major policy document from the government’s table.

The first and most important task for Mukherjee is to conclusively close the chapter on slowdown. This requires two things. First, government intervention through increased expenditure on infrastructure to generate demand. And second, overhaul of the public delivery system to gain credibility. Having squandered the opportunity to do so in its previous term, the

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