The Union Budget is just 36 hours away and the media is abuzz with expectations of different segments of the economy and speculation on what Finance Minister P Chidambaram might offer in what might be the last Budget of the UPA Government.
CNN-IBN's Editor-in-Chief Rajdeep Sardesai explained the various pulls and pressures on Chidambaram as he prepares to unveil the Budget and also tried to look at the various possibilities in an online chat with readers on Web18's business website www.moneycontrol.com.
Here we reproduce the full text of the chat:-
777.com: Sir, anything special from Budget?
Rajdeep Sardesai: I am expecting this to be a Budget that will probably waive off Rs 32,000 crore worth of interest on farm loans of small and marginal farmers. I expect tax concessions, possibly even to corporate India on this occasion.
JVPrajapati: Budget will be election-oriented or economy-oriented? What do you say?
Rajdeep Sardesai: I don't see a pure election-oriented Budget. That will probably be the burden of Budget 2009. At the same time, the Finance Minister's desire to achieve fiscal prudence will be challenged this time with the need to give sops to different social groups.
Manish S Joshi: What will be impact of Budget on markets?
Rajdeep Sardesai: I don't think even the Finance Minister has an answer to that question!
Gabriel97_josep: Hello Rajdeep, will there be any change in the tax slab?
Rajdeep Sardesai: I don't see a major tax rationalisation, although the Finance Minister has hinted that he is keen to give tax breaks.
Sunilsmatkar: Do you expect this Budget will help UPA Government to win the next election or at least get some votes in major proporation so that they can rule the govt once again?
Rajdeep Sardesai: I think Sunil historically, barring the 1971 elections (and that too to a limited extent), Budgets and economic policy decisions have had limited impact on voters. Finance ministers need to understand that and resist the urge to deliver 'populist' Budgets. Remember, when Chidambaram was in the UF Govt, he allowed the Pay Commission recommendations to go through. It cost the state exchequer crores, but didn't have any impact on the voter.
RC Chada: Hi Rajdeep, this being the last Budget of UPA, is it likely that all fiscal prudence will be forgotten?
Rajdeep Sardesai: It may not be the last Budget. There could still be Budget 2009. But yes, there is a real fear about fiscal prudence, especially with the proposal to extend NREGA across the country, farm waivers, and the Sixth Pay Commission recommendations to come through in April.
5bhagwan: In earlier yrs govt ignore aam aadmi, but they never forget anyone in last yr of their tenure? Is this going to be true this time too?
Rajdeep Sardesai: Am not sure who is the aam aadmi ? Is the Indian middle class and the urban poor not part of the aam aadmi constituency? Will spending in the social sector not benefit the aam aadmi across the country? I have no problem with an aam admi Budget, provided it is better targeted.
Joseph557: Which way will this Budget be different considering it is a pre-election Budget.
Rajdeep Sardesai: I think the real challenge for the Finance Minister is fiscal prudence in a big election year. It remains to be seen how does he resist the temptation to announce large expenditure schemes.. I think there will be an even greater focus on agriculture this time, and hopefully, a stronger emphasis on urban infrastructure.. expect handouts and sops.
Smmallya: Rajdeep, 'India Shining' campaign (economic basis) never helped any party. So even a good Budget many not help Congress. What's your take?
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Rajdeep Sardesai: I agree... don't think this government's future is dependent on the Budget. Politics in this country is becoming more and more localised, fought on local factors...
5bhagwan: Are you happy with the Rail Budget declared by Lalu?
Rajdeep Sardesai: I think Lalu is a master communicator and salesman. His Rail Budget was an exericse in clever salesmanship. But I don't think he has done enough on the ground to truly modernise the Indian Railways. The devil sometimes is in the details, and while Lalu's budget is high on rhetoric and promise, am still sceptical of delivery.
Jetsi: Hi Rajdeep, do you think that a populist Budget as predicted by most analysts with an eye on the forthcoming state?
Rajdeep Sardesai: It depends on what you mean by 'populism'.. I think there is a general direction which the Finance Minister has given to his Budgets.. I don't expect a major change in direction. I think there will be a greater focus on agriculture and social sector.. but I wouldn't be surprised if PC reaches out to corporate India too this time.
Smmallya: In the last Budget, PC committed many things for Mumbai. Don't see anything changed. Who is responsible Maharashtra CM or FM?
Rajdeep Sardesai: As a Mumbaikar by heart, I do agree that the Centre could do more for the India's financial capital. I think the Prime Minister has taken some steps towards annoucning programmes for Mumbai in the last 12 months, the challenge really is with the delivery systems and with empowering local administrations.
Fundaresearc: Hello sir, Budget's focus on inflation, agriculture, infrastucture, healthcare, education, rural India, aam aadmi?
Rajdeep Sardesai: I think you've got the priority areas bang on.
Shrikantdurge: Do you think pay commissions are bad than increasing the Defence Budget?
Rajdeep Sardesai: I think there needs to be a rationalisation of pay structures for the public sector and government employees. But it can't be done by making the governmentt a bloated organisation. With higher salaries must come greater accountability and some attempt at downsizing.
matrimony724: Aside from the Union Budget, I just want you to give me your take on the Indian stock market.
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Rajdeep Sardesai: Let me be honest, I am no expert on the economy or the markets... Udayan is your man for the markets. I have the easier task of giving political gyaan.
Ravibhattar: Why we do not ask Finance Minister to present the achievements of the last Budget vis-a-vis the targets? This will help induce accountability somewhere in our bureaucracy and on polticians.
Rajdeep Sardesai: That's actually a good thought. I think we need to make less of a noise about Budgets, and look at government policy as a round the year exercise. The Budget should be more a vision document than one which is seen to attend to every nitty-gritty of financial policies.
kvshari: Is there any news on the 6th Pay Commission?
Rajdeep Sardesai: From what I have heard, the recommendations are more or less ready and should be made public in March end or early April.
newtest: Hi Rajdeep, it worries me to see the amount allocated on defence each year but nothing fruitful done, there is a dearth of jawans today? What`s the solution?
Rajdeep Sardesai: I think the defence budgets are unfortunately seen as a national 'secret', no questions asked, no answers given.
sweta1742: Hi Rajdeep, as you own a media company, what do you expect from Budget?
Rajdeep Sardesai: Raising foreign investment limits in media companies!! Also, would like to see FBT on ESOPs withdrawn!!
Yogesh.parvate: How would you rate the performance of the government in the last four years?
Rajdeep Sardesai: I think, much like most things in this country, it's been a fifty-fifty performance.. many good ideas, implementation has been a problem, and coalition pressures have not helped either.
shantus: Hi Rajdeep, do you agree that Salaried people are soft targets of all FMs and they hardly do anything salaried class knowing the fact that salaried cannot escape? Don't you think this really is a partial treatment to salaried?
Rajdeep Sardesai: Couldn't agree with you more.. Someone needs to tell the FM that the real Indian voter is the salaried Indian who needs to have the investible resources to live a better life.
hareshdadia: Hello Rajdeep, has the Budget become a non-event?
Rajdeep Sardesai: I don't think we can call it a non-event. But yes, we need to give it perhaps a little less importance.. one of the biggest changes in the country in the last five years has been the shift from the Centre to the states.. there is a greater need to look closely at state budgets.
vijay-r: Dear Rajdeep, what happened to the reforms - judicial reforms, labour reforms etc? Of late we are not hearing anything on these. Have our politicians forgotten the reforms agenda since it has become a bad word? When will real economics overtake politics?
Rajdeep Sardesai: Reforms in this country are still hostage to contrary political pulls and pressures.. In a country as large and diverse as ours, I expect reforms to remain subject to political pressures mounted by different interest groups, and, I might add, conflicting corporate interests.
Manoj Budhia: Waiting for India to become a developed country and a super power might take another 20 years.
Rajdeep Sardesai: Might be a good question to end on.. I think India is already a global player, don't think we can aspire for super power status without first having a stronger social sector, a more transparent legal system and a more accountable political system. Don't know when that will happen, but India teaches you to remain an eternal optimist.. nice talking to you guys.. see you soon and keep watching CNN-IBN and CNBC TV18!
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