Video: Dissecting Budget 2012 with Firstpost
The Budget contained proposals to increase revenues, but spoke very little about curtailing expenditures.
A damp squib. That's what the Union Budget was.
Finance Minister Pranab Mukherjee could have done a lot more on cutting subsidies and boosting growth. But he didn't.
In a post budget discussionFirstpost Editor-in-chief R Jagannathan and Sourav Majumdar, editor of Entrepreneur magazine, summed up the feelings of most people when he said, "He (the FM) did a little here, a little there... he could have done much more."
It was billed as Mukherjee's make-or-break budget. As it turned out, he didn't make much of the opportunity nor broke anyone's back by trying to do too much.
The Budget contained proposals to increase revenues, but spoke very little about curtailing expenditures. Big-bang reform measures were completely missing.
The introduction of a 'negative list' for service tax was probably one of the few things the FM got right, although in the short-term, it is very likely to trigger 'cost-push' inflation, both speakers said. Indeed, inflation might not come down in a hurry.
Nevertheless, given that the fiscal deficit is being projected at a lower 5.1 percent for the next financial year, the Budget may give some reason for the Reserve Bank of India to cut interest rates (at least as a token gesture) next month.
The relief give to the middle class (the income tax exemption limit was hiked to Rs 2 lakh from Rs 1.8 lakh) was also too meagre given the pace of inflation.
Watch the whole Firstpost interview above.