QUICK TAKE
Was the Union Budget a success and does it strengthen the UPA’s electoral prospects?
03 March 2008
We asked... Sunil Godhwani, CEO, Religare, M.F. Vohra, Pres., All India Rubber Ind. Assoc., Arpit Agarwal, Group CEO, Dawnayday AV, Anshuman Magazine, CMD, CB Richard Ellis, South Asia, Arun Firodia, Chr, Kinetic Group, Manohar Bidaye, Chr, Zicom Elec. Security Sys., B. S. Kumar, Group COO, Network 18, B.B. Chakrabarti, Prof., IIM, Kolkata, Ajay Shah, Sr Fellow, NIPFP, Pawan Gulani, Mgr, Strategy, Fin. services division, Reliance Retail, S. Rajagopal, AVP, SSKI Corp. Fin. and Inv. Banking, Suresh Surana, Founder, RSM Astute Group, R. Venkatesan, Sr Fellow, NCAER, Ajay Sahai, DG, FIEO
"Budget 2008 is focused on inclusive growth with higher thrust on education and healthcare."
Sunil Godhwani, CEO and MD, Religare Enterprises
"The intention of the Budget may be good, but the execution also has to be efficient."
B.B. Chakarabarti, Professor, Finance and Control, IIM, Kolkata
"It was a welcome Budget, but the supply-side bottlenecks are not being removed."
Arun Firodia, Chairman, Kinetic Group
YES BECAUSE: Some respondents did feel that this year, Finance Minister P. Chidambaram delivered a well-balanced Budget that focused on all the right issues. From inducing greater consumption spending by increasing disposable income to maintaining the momentum of investment in the economy by cutting import duties on capital goods, all these steps would, in the long term, imply a high growth rate and, thus, better electoral prospects for the UPA. There used to be a time when people would sit glued to their television sets as the Finance Minister delivered the much-anticipated Union Budget speech. Today, the Budget may not be so eagerly awaited an event for anyone besides the media and various political lobbies, but its implications for the economy and its people are still as relevant.
NO BECAUSE: The Rs 60,000-crore farmer loan waiver was clearly the hero/villain (depending on how one chooses to look at it) of the FM’s address to the Parliament on 29 February. Some called the move ‘path breaking’ while most felt it was ‘populist’. Some of our respondents shared similar sentiments. One view that was brought up was that the loan waiver just appears to benefit the small and marginal farmers, but the truth remains that the poorest farmers are not even exposed to the formal banking sector and rely on local moneylenders for their credit needs. Also, some felt that just the right allocation of funds (as it has been done in areas such as education) is not enough as long as its implementation is not effective, as that too reflects poorly on the government’s performance.
MAYBE BECAUSE: Some of our respondents felt that there was nothing spectacular about the Budget. A point made by one of the respondents was that the Budget doesn’t even play an important role in deciding the electoral fate of the government any more. A historical look at the last two elections would validate this point. Besides, some also felt that the FM played ‘safe’ by abstaining from making any outrightly populist (except, perhaps, for the loan waiver scheme, which most believed to be populist in nature) move to please various lobbies. To please one side almost always means to displease another side. In this regard, some felt that it was a rather forgettable Budget and might not have any significant impact on the government future electoral prospects.
(Businessworld issue 4-10 March 2008) |
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