Pranab Mukherjee's effort this year marks the beginning of the end of the budget document as a definitive statement on policy and direction. In the past, budgets used to be a kind of state-of-the-union message, a strong indication of vision, direction and drive.
Not any more. The budget exercise is gradually getting reduced to an annual accounting statement, and this budget is an indication of that trend.
The only thing we get in this budget is a fiscal deficit number and an indication that subsidies will be cut to 2 percent of GDP this year and to 1.75 percent three years down the line. But did it give us any roadmap on how to get there?
The budget told us that subsidies will be brought down by around Rs 60,000 crore this year but we don't know how this will be achieved. How are we going to reduce subsidies by such a huge amount in one year?
In fact, the indications are negative. Take petrol prices - which are supposed to be deregulated. First, we are told that petrol price increases are being held in abeyance because of the Uttar Pradesh elections. The elections have come and gone, but where is the petrol price hike? What are they so scared about? What is the big deal here? What is the problem is raising prices by a few paise every fortnight, so that people can get used to it?
Now if you can't even hike petrol, how are you going to raise diesel prices, which are much more vulnerable to populist pressures? If we don't fix diesel pricing, it could wreck the economy. We have no roadmap here, too.
The other thing wrong with this budget is that it brings back the idea of Big Government - that the government can do no wrong, that it has the answer to everything.
Vodafone is a case in point. Having lost the case in the Supreme Court, the government is now trying to legislate a retrospective amendment to the laws - like it did in the case of ITC years ago. What message is this going to send to foreign investors - who were extolling the independence of our judiciary with this single judgement?
Then, take the ONGC case. Two weeks ago, the government disinvested ONGC shares through the stock market offer for sale route, but suddenly the budget imposes a cess. If this had been done by a private investor - where a material price-sensitive move was suppressed two weeks before a share sale - Sebi would have taken a dim view. This is a sign that the government thinks it can do anything - and no one should question it.
But there are some positives in the budget, too. The good thing is that the government raised revenues by excise and service tax increases. Service tax has been extended to all services, barring a negative list. This is a good move and in line with the plan to shift to a unified goods and services tax (GST).
It is also not a tax-and-spend budget. The good thing is that there are no huge spending plans, and the fact that the budget gives us no new shocks is a clear plus. We should be happy for small mercies.
But the failure to give us a roadmap on how subsidies are going to be cut tells us that the government still is not sure what it will do. It is not good that we don't know how to get there. The value of having an annual budget is to that extent diminished.
Raghav Bahl is founder and head of the Network18 group which owns CNN-IBN, CNBC TV-18, and various other TV news and general entertainment channels. Network18 is also publisher of Firstpost and moneycontrol.com.