Budget 2013: Chidu has done well with Congress core constituency

Budget 2013 had to be a tightrope walk for Finance Minister P Chidambaram. He had to mix politics with fiscal prudence and limited adventurism with pragmatism. He had to enthuse the markets without alienating the masses. And he had to present a pre-election year budget for a shaky government. More importantly, he had to live up to the expectations he himself had raised in all stakeholders in the economy. In the end, he seems to have done a good balancing act. If the budget carries a subdued populist streak, it has to do with the spate of assembly elections coming up this year. Also, there are chances that the minority government surviving on outside support could collapse anytime later this year. With its popularity on the decline across the country, the Congress realises that it has a very tough year ahead. This reality certainly weighed heavy on the finance minister. To expect something more dramatic from Chidambaram under the circumstances would have been highly optimistic. The Budget addresses adequately to the core constituency of the Congress: rural India. Allocation for agriculture is up 22 per cent; Rs 33, 000 earmarked for MNREGA; there’s stress on expansion of agricultural credit; and the ambitious Food Security Bill gets a leg up. Given the urban mood, the party does not invest much hope in it for 2014 elections. Yet it does not leave the constituency entirely disappointed - tax slabs remain unchanged and JNNURM gets extended with an allocation of Rs 14,873 crore. [caption id=“attachment_643574” align=“alignleft” width=“380”]  A govt school in UP. AFP[/caption] If fiscal consolidation and wooing investment were a big issue at the other end of the economic spectrum, Chidambaram does not disappoint much. He touches the right trouble points - fiscal deficit, current account deficit and lack of growth. The measures he spelt out to tackle these problems don’t go the whole hog but at least enough to soothe ruffled feathers. Read in consonance with the reform measures taken up in the last six months, these would inspire some confidence in the business circles. As reactions from the experts suggest he has addressed the concerns of the corporate sector with a statement of intent if not of action. The government won’t mind the 10 percent surcharge on the super-rich, who, in any case are never important from the electoral perspective. If some BJP members call it a clever budget, it’s actually so. It’s a populist budget, but carefully camouflaged with what appears to be economic common sense. From a purely political perspective, it’s a pragmatic budget, taking care of a wide spread of constituencies across segment. As the Congress prepares for elections, it has something to go to people with.