A Control-Alt-Delete Budget from PC?
By Murli

Ten years after his much touted 'Dream Budget', Finance Minister Palaniappan Chidambaram has come full circle and presented a Nightmare of a Budget (well, almost). That this has come on the back of a resounding 9.2% GDP growth is the first half of the India Shining story. The dream start hunkered down to a nightmare finish with the electoral reversals in Punjab and Uttaranchal. With UP waiting in the wings, and more States to follow later, the FM had the most unenviable job in his hands - to present a budget that would battle inflation and bring back the votes. He had a fight on his hands, and he decided to chicken out.

It's the return of India Whining - Part I. No one, but no one, is happy with Budget 2K7. All through his 100 minutes of spewing statistics and figures that perhaps made sense only to paneled experts in TV studios (it's their bread and butter, guys), PC kept looking behind to check whether the Aam Aadmi was with him, whether his political bosses were happy, and so on and so forth.

The salaried class are fuming, because the exemption in IT is far less than they had bargained for and even the few bucks that you save is taken away by the increase in education cess from 2 to 3%.

The corporates are sore with the increase in dividend distribution tax and the investors are generally disappointed with the budget (the share market operates by its own mysterious rules, and it is foolhardy to try and analyse it with logic).

The pro-reformists are angry and feel the very ones who heralded reforms in the economy are today drawing curtains over it. This, at a time, when India was poised to enter the decisive stage in freeing up the economy and integrating it with the world economy. With China looming dragon-like, PC has tied down the Indian Elephant to the ground, they say.

The industrialists smell a rat and feel PC has opened the door a bit for the return of licence permit raj. Cement prices are too high? It is all because of you blood sucking capitalists. So let us bring in price controls, ostensibly via tax breaks. An acknowledged expert gives this delightful example: The prevailing price of a Rs 50 kg bag is Rs 210 and there is an excise tax benefit of Rs 12.5 per bag. With this benefit, the price per bag will be Rs 197. But to avail of the benefit, the bag has to be sold for less than Rs 190!

The IT community is not celebrating because of extending the fringe benefit tax to employee stock options (ESOPs) and making minimum alternate tax (MAT) applicable to software companies.

The real estate industry is seeing a slowdown with the extension of service tax to commercial rentals. When commercial space is in short supply, this move will surely act as a disincentive to building up more space?

Which leaves out agriculture? At least the farmer must be a happy man? Take the issue of farmers' suicides. The Budget has nothing to offer on the one score that could really help: ensuring that farmers get remunerative prices for their produce. What PC did offer was (yawn), another committee. Nothing to offer on the biggest problem of India's water sector. Nothing to tone up the efficiency of our irrigation sector - which is one of the lowest in the world. We have to make do with nice, sounding slogans.

If this sounds like a very harsh and unfair indictment, don't worry, it's okay. The budget affects only around 40% of the Indian economy!