M.S.Vijayakumar

A BUDGET WHICH DESERVES COMMENDATION

This is a budget which addresses several conflicting interest in a well balanced and well designed way. Striking a balance among three macro economic objectives pulling the economy in different directions was the toughest job on hand for Pranab Mukerjee. Reigning the fiscal deficit, keeping the growth momentum and keeping the borrowing down , the most formidable job for any finance minister has been handled deftly by the finance minister.
It is too much to expect a finance minister to spend on a whole lot of things to ensure a robust rate of economic growth without raising the revenue for the same. Pranab Babu had a Hobson’s choice in this regard. Either he had to spend less or borrow more or resort to taxation. The right economic choice (but a politically explosive one) has been made by the FM in increasing the excise duty, the bad effects of which will be offset by the disinvestment in PSU stocks. Increase in the prices of petroleum products, a step pursued by all governments hitherto was the reliable choice before the finance minister. The inflationary effects of the same have to offset by higher production and higher growth rate.
What the finance minister has taken away in the form of higher excise duty is compensated to a little extent by leaving more money in the pockets of people by way of broadening of income tax slabs.
All credit goes to Pranab Babu in not neglecting the interest of the unorganized labour through his contributions to the new pension scheme. The agricultural sector has also drawn his attention. No wonder the entire economy including stock market has received this budget well by showing positive signs.

M.S.Vijayakumar

msvijayakumar.vijaya@gmail.com
( Principal and Professor of Economics in D.Bnumaiah’s College, Mysore and also a columnist in Prajavani, a national daily from Karnataka)