It Could Have Been Better It Could Have Been Worse

What made people anxious or more interested in this budget is that it came under the overhang of demonetisation, which seriously hit the economy. Even the government now admits that there will be a substantial shortfall in growth. Last year at budget time GDP growth of 7.6-7.8 per cent was being spoken about. The CEA in his report estimated this to be between 6.5 per cent and 6.75 per cent.

- Mohan Guruswamy

The presentation of the budget is a much awaited annual ritual. It was very important in the days of license raj when the government exercised its discretion or didn’t show it to favor some and punish others. For instance it was in one such budget that the rates for purified terephthalic acid (PTA) was reduced and dimethyl terephtalate (DMT) increased to determine the outcome of the most fiercely fought corporate war in India’s history between two top manufacturers of polyester filament yarn. The rest is history. One became a colossus and the other is now a dwarf.

The era of economic liberalization ushered in by PV Narasimha Rao has put paid to that often-lucrative discretion. There is a predictability of rates and their continuity. This is a predictability of ideological direction. With discretion reduced and direction assured there can be few real surprises in a budget.

This budget has no surprises. What little scope there might have been was removed by the utterly reckless and foolish act of demonetization. To heal the wound would require bitter medicine. Bitter medicine needs an externally forced crisis or a change of regime to precede it.