Dr.Pranab Mukherjee's "Political Budget" with a stamp of Sonia Gandhi's mediocrity, jolts Dalal Street's advance, as the Sensex Crashes down, in Arabian Sea:

[Now those who elected this UPA Government on the plea of keeping BJP and its allies out of power, are the culprits, for massacre in Dalal Street. The doors of "Torture Chamber" have just opened and I am sure you will see such wanton tortures of Capital Markets, for some more years...This is the same UPA government which was responsible for the Mumbai carnage and serial bomb blasts in India.

More such punishments for the Dalal Street is on the cards, unless FM seriously thinks of reloading some of the proposals in the bill.

This UPA government was never investor friendly and nor will it be for at least a couple of years. Last few years it only milked the capital markets, giving very little to it. This time, FM disappointed even the Scheduled Castes also, with meagre fund allocation...

I was expecting this kind of "Toota Foota budget", and that is why I ended the Sunday Report yesterday, with the line, "The new finance minister has few options, which he may explore to balance the deficit and expenditure. Overall I am looking for a “Political Budget” from the Finance Minister." The sins of the past, created by P Chidambaram, viz,. the farm loan waiver, fertilizer subsidy, oil bonds have hugely contributed to the fiscal burden of the country and will continue to haunt the UPA Government. Moreover, half hearted stimulus packages and large scale looting of public funds, took the fiscal deficit to astronomical levels."

More spending by the UPA might lead towards higher interest rate regime, pushing us towards deflation (in the economy). This directionless and ill conceived budget will not take us anywhere. I am totally disappointed...

Thus at the end of the day we have A VERY POOR AND UN-INNOVATIVE (Read Vote Bank oriented) BUDGET FROM A PERSON WHO HOLDS DOUBLE MASTERS DEGREE, AND THIS "HOCH-POCH-BUDGET" WILL NOT GET MORE THAN 3 (Three) OUT OF 10 (ten) POINTS FROM ME....

If Dr.Mukherjee has to perform she has to leave the company of this half-illiterate Italian Lady, who hails from very poor background. But how many know the real story.....Moreover we have to decide whether we need a statesman or we need an academically brilliant gentleman as Prime Minister of this great country; who is better suited as a bureaucrat/teacher rather than a politician. The problem is that voters forget the difference between a professor and a statesman while voting...

Dr. Mukherjee, tried to play the political card in view of upcoming elections in some states, rather than for pan India (Mr.Laloo Yadav, shouting in between budget speech, that there is no package for Bihar. But Lolooji, Bihar has BJP-JD govt. and hence you know the reasons for omitting Bihar from the list.

"Bloorrrrr.....Blooorrr....."...Kya Lolooji, thik bola na...??....nahi samjha ka......nahi samjha.!!!....Are baap re bap, up akal se bhi Laloo hai ka"??!! ).

No meaningful relief for the SMEs, though the FM tried to pour funds in the "bottomless agriculture pit", for the fund to be eaten up by the goons of the UPA; by floating various fictitious schemes...Every year this fund flows into Bay of Bengal, Arabian Sea and Indian Ocean--this time also it will not be an exception. However, increased allocation to infrastructure, some minor tinkering in the indirect taxes and removal of FBT could be positive going forward. But no talks on liberalization of FDI norms, or on Disinvestment front points towards a non-reform oriented budget...]

Finance minister Pranab Mukherjee's speech failed to sketch out the new UPA government's larger vision of reform and growth, and thus lost out on a major opportunity to energise the economy's flagging animal spirits. That said, the Budget is not the complete damp squib on growth and reform that the markets' nosedive would have us believe.

In a global scenario where the major economies continue to contract, even if more slowly than before, there is no way the government could have taken the pedal off fiscal expansion, to keep India’s growth momentum going. Thus, the largest ever fiscal deficit, measuring 6.8% of GDP for 2009-10 and a tax burden on the economy that is lower, proportionate to GDP, than in the last fiscal, is a plus, rather than a negative.

In fact, 6.8% of GDP is the Centre’s deficit alone. Take into account the states’ deficit of nearly 4% of GDP and likely, albeit unstated, off-budget borrowings to finance fertiliser and food subsidies, the combined government borrowing requirement would be a little under 12% of GDP. That is a huge piece of fiscal stimulus.

To avert the risk of this huge borrowing requirement pushing up interest rates and choking off growth, the government should proactively announce an intention to raise a sizeable part of it outside the country. That should settle domestic jitters over a liquidity crunch.

An unheralded medium term fiscal policy statement put up on the Finmin web site targets a fiscal deficit of 5.5% of GDP next year and 4% of GDP in the year after. It is surprising that Mr Mukherjee failed to flag this off.

Then there is the infrastructure agenda. The government’s direct spending on roads and railways is slated to go up sharply. Financial engineering is on the cards - take-out finance and refinancing by IIFCL - to ensure that enough credit would be available for infrastructure projects. The government continues to swear by public-private partnership.

For all their flaws, PPP projects are enhancing India’s infrastructure right now. And there are sufficient mechanisms outside the Budget for one to hope that future PPP projects would be better designed and less vulnerable to post-contract abuse.

Many people tend to dismiss the entire inclusion, rural development and empowerment agenda as so much political fluff. On the contrary, this is the core of lasting reform.

To appreciate this, one must have clarity on what constitutes reform. Reform is ultimately about freeing up the creative energies of the people at large. Not just of people who are entrepreneurs and would-be entrepreneurs now. But also of the hundreds of millions of those who currently focus just on subsistence.

Financial sector, tax and administrative reforms are means to this end. True, India has a demographic dividend to reap even with existing levels of output per worker. But imagine the bounty if one billion plus Indians can afford to think beyond subsistence, think creatively. For that to happen, we need not only the kind of inclusive policies being pursued by the government but also complementary political mobilisation to empower people. That, of course, goes beyond the Budget.

The reiterated commitment to stick to the April 1, 2010 deadline for switching over to a Goods and Services Tax is a plus. The Budget asks the citizens to await further action in eight areas, pending reports by expert committee or finalisation of law or action plan: building a natural gas grid, offering relief to farmers who are indebted to moneylenders rather than to banks, operationalising food security, freeing up petroleum product prices, addressing the concerns of private investors, a direct tax code to streamline all direct taxes, a scheme to overhaul fertiliser subsidy and fiscal consolidation, a roadmap to which would be unveiled by the 13th Finance Commission headed by Vijay Kelkar, whose report is due in October. On some of these, we have already had many committees. The implicit dialatoriness disappoints. At the same time, the retention of this reform agenda is reassuring.

On the whole, the Budget marks continuity of slow reform in the right direction, even if it fails to release adrenaline in our market bulls. [With inputs from Internet]