Their entry into budget speeches is no guarantee that they will be implemented. Barring that first budget of 1991, every budget since then has several instances of successful exit. One should go back and read UPA-I's first budget of 2004-05 to discover that many promises are now likely to be repeated in UPA-II's first budget for 2009-10.

Even if made, some promises will get bogged down in inter-ministerial wrangles, others in state-level implementation, and still others in getting legislation pushed through Parliament. Mention of pensions, insurance, FDI in retail or civil aviation, subsidy-targeting, APMC Acts, APM for petroleum products, disinvestment, police reforms and even food security in the budget speech is neither necessary nor sufficient. Even if there is PMO and cabinet approval, the budget is really a finance ministry exercise. Finance ministers can't drive reforms alone. Nor should one ignore resistance to a finance minister appropriating glory from a reformist idea. Witness the wrangling over who should receive credit for NREGS and one doesn't mean the left. True, budgets since 1991 have become equated with big bang policy announcements in Part A of the budget speech.

But for reasons just mentioned, the shorter the Part A, the better. In an ideal reformer's budget, there should be no Part A at all. More of that in a moment. Let's turn to taxes.

The core tax reform agenda is one of unification, harmonisation and removal of exemptions. Without that, compliance costs can't be reduced either. Nor can the tax base be broadened. The Laffer curve is nothing but this, for both direct and indirect taxes. There is a double problem with discretionary taxes.

... contd.