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Expectations high as Mukherjee readies for national budget

Wednesday, 01 July 2009, 01:57 Hrs

It has already been clarified that 51 percent equity will remain with the government but even this gives considerable leeway to a large number of public sector companies.

This will help the government to not only raise more funds to bridge the budget deficit but also meet its stated goal of enabling the public to have a greater stake in public sector enterprises.

The budget is likely to present a road map for divestment though the implementation may take place only gradually over the next year.

Yet, resources from this count alone will not be sufficient for the kind of spending that will be required for the social sectors in the coming year. There is tremendous pressure on the finance minister from newly elected members of parliament to ensure that a development agenda for the poorest of the poor is given priority.

In addition, it is felt that some middle class sops like tax concessions also need to be handed out to the electorate. While the focus of employment will remain the much vaunted rural job scheme, the National Rural Employment Guarantee programme, industries which have faced large layoffs will also have to be given special attention.

Education and health are expected to be given substantial increases in outlays in a bid to improve the quality of life. Funds will be required for all these schemes and the tax net is expected to be cast over a wide range of commodities to boost sagging revenues.

One of the most eagerly anticipated elements of the budget proposals by industry is a stimulus package to boost investment. The UPA can already take credit for the impact of the stimulus packages that were unveiled earlier in the year.

Yet another stimulus package, however, seems to be in the works to perk up investment especially in the key area of infrastructure. This is inevitable given the continuing recession in the economy, though there are signs that an upswing is under way.

Thus the finance minister has to deliver the most difficult of tasks - a budget that taxes widely enough to raise resources for a huge spending programme and at the same time look appealing to the average citizen.

This is a tall order indeed. But Mukherjee is not a novice in the game of budget making. He began his stint in the finance ministry as minister of state for revenue and banking in Indira Gandhi's government in 1975 and later became finance minister in the Rajiv Gandhi government.

A veteran, astute politician, he will have to rely on all his experience to literally pull a rabbit out of the hat this time. He has little choice as all his colleagues in the government are banking on his ability to work some magic in the budget.
Source: IANS

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