International BusinessSurjit S Bhalla: Beginning of the end of C3?
It is relevant to understand the background to Budget 2009/10. Hope and despair is how I would describe it. Hope because the government finally had a political mandate, a vote much beyond its own optimistic expectations. “No more excuses” was the Congress’s future. One would now know for sure whether the Communists within the Congress party really held sway over policy decisions. Five years of inactivity can dull anybody, and the Congress was getting geriatric in every possible way. Good men, bad ideas had turned into formerly good men, worse ideas.
But in a flurry of pre-Budget activity, came some announcements. The government was not averse to financing leaky public expenditures (note that I don’t say the fiscal deficit — more on this later) by selling shares in government-owned companies. Salman Khurshid, the minorities affairs minister, made some very intelligent noises about the need for affirmative action — and the rejection of reservations, in education and jobs. The education minister, Mr Sibal, announced his intentions of transforming the education sector. Now I think that one national exam is a terrible idea, but he is to be applauded for admitting that the education system is broke, very broke. More than repair it needs reconstruction, and Kapil’s pronouncement was a genuine uplifting of the reform spirits. Next, in a signal that the government finally will begin to concentrate on leakages in delivery of social services, Nandan Nilekani was appointed as czar to bring in a unique identification card for all citizens — honestly, to serve the poor better. Then before one could say ‘Wow’ the government announced its intention of scrapping Article 377, a law which defines homosexuals as criminals. The law is even older than the Congress party and the fact that it had continued to exist was more than shame for our much-vaunted democracy.
An economist’s steering hand is visible; Budget 2009/10 has a well thought-out reformist touch. Previous UPA Budgets had meandered, lost purpose, and were too consumed by high economic growth which they did nothing to make happen. In a welcome departure, this Budget proposes, and intends to deliver, a full set credible second-generation reforms. All in all, one of the best Budgets I have seen in a long time; actually among the two best Budgets since 1991, with Sinha’s BJP 1999/2000 budget, and not the so-called Dream Budget of 1997, being the other very good Budget.
Surjit S Bhalla, MD, Oxus Research & Investments
The author is anchor of Tough Talk, a talk show on NDTV Profit.
email: surjit.bhalla@oxusinvestments.com