Budget flops, Pranab wins: Only FM between UPA and disaster

As the dust begins to settle on Budget 2012, it seems the only clear winner is the finance minister himself. And this, despite the widespread disappointment with the contents of the budget.

There are actually two ways to rate Pranab Mukherjee’s the budget.

One is to look at what it tries to achieve economically - and most people, including _Firstpost_ editors , are clear it missed an opportunity. Analysts are agreed that the budget is seriously wanting in many things. Will it mean fiscal consolidation? Not quite. Will it reduce subsidies? Not sure. Will it bring back growth? Unlikely. Will it curb inflation? Certainly not. Will it take forward reforms? There is more talk about it than action.

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In fact, the main plus of the budget is that it does not make a bad situation worse.

There is, however, another way to look at the budget - and that is from the political economy point of view. And here it is a clear success. The primary intent of Pranab Mukherjee’s budget was to ensure that it does not ruffle any feathers among distrustful allies even while telling the rest of the world that he is trying to fix the economy’s problems.

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This twin aim has been achieved.

This is why Pranab Mukherjee is the main winner in this budget. It clearly establishes that he is the UPA’s only real political asset in a rapidly deteriorating environment for the Congress party. He may only be postponing the inevitable, only putting his finger in the dyke, but Mukherjee is the last man standing in the UPA.

Consider UPA’s other leadership “assets”.

Sonia Gandhi and Rahul Gandhi have been badly mauled in the recent elections. Since Sonia is not a future PM candidate, the heir apparent is clearly damaged goods.

Manmohan Singh is widely seen as a wimp. His office is essentially run by his Principal Secretary, Pulok Chatterjee. Singh’s authority is more or less over. In Friday’s budget session, Manmohan Singh looked his usual lost self - something from Madam Tussaud’s.

P Chidambaram carries himself better in debates and articulation, but he lacks the political negotiating skills or widespread respect that Mukherjee receives. Only a Mukherjee can call opposition leaders a bunch of “petulant children” and get away with it. Only he can wag a finger at rivals and quell their aggressive behaviour.

Defence Minister AK Antony is in the Manmohan mould. Honest personally, but useless as anything other than a doormat for dynasty.

Kapil Sibal is a mischief-monger. The more he battles for the party, the more the public loses trust in the Congress. His manipulative skills may work in law courts, but in the public arena, his smug and smirk-ridden visage makes him seem untrustworthy to the core.

The rest of the Congress leaders are second-rungers or lightweights - like Salman Khurshid, or Veerappa Moily.

This leaves Pranab Mukherjee as the only asset in Sonia Gandhi’s scheme of things.

Who else but Pranab Mukherjee could have convinced her that this was not the time to let loose a Food Security Bill, when the fiscal deck was burning. In fact, the most noteworthy points in the budget - and which is why Pranab deserves kudos - are the cuts in allocation for two flagship schemes dear to Sonia’s heart: the Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGA, for short) and the Food Security Bill

While NREGA gets only Rs 33,000 crore in 2012-13, Rs 7,000 crore less than this year, the Food Security Bill (FSB) gets only lip service and is probably in cold storage. When The Economic Times asked Mukherjee whether the FSB will be implemented this year, he said: “I cannot give you a specific time frame. It will depend on the parliamentary standing on the parliamentary standing committee… We shall also have to consult the state chief ministers because they have expressed their views…”.

The answer is probably not this year. It will be dusted up next year before the 2014 elections.

The budgetary allocations indicate that FSB will get almost nothing this year as the food subsidy outlay is just Rs 75,000 crore - much, much lower than the Rs 95,000-1,00,000 crore indicated by the food ministry last year.

The implications are clear: Pranab has convinced or cajoled Sonia Gandhi to give him a free hand to squeeze social sector spending this year. This is something neither Manmohan Singh nor anybody else could get done with her.

For the record, Sonia Gandhi was seated next to Mukherjee when he made his budget speech.

Of course, he has also defanged Mamata Banerjee - though this drama is still to play out - over the railway budget by egging Dinesh Trivedi on to do his own thing. Mukherjee’s statement on the floor of parliament that he okayed the railway budget and not the PM or the cabinet tells its own story loud and clear.

It is also worth recalling that in the nuclear deal negotiations with the Left in UPA-1, Mukherjee was Congress’ negotiator-in-chief. In the Anna agitation, it was only after Pranab Mukherjee entered the picture in August that the fast ended and the Lok Sabha passed a “sense of the house” resolution steered by Mukherjee.

In the end, Pranab also managed to see Anna off and pulled off a stalemate in the Lokpal Bill to quieten things on the anti-corruption front for the UPA.

Looked at in any way, it is obvious that Pranab Mukherjee is the man who stands between UPA and political disaster. Pity that Sonia does not trust him with the prime ministership. He could probably have pulled it off better for UPA-2 than anyone else.

See more Budget 2012 videos and expert views on Firstpost: Ajay Shah , Rupa Rege Nitsure , Indranil Pan , Ashima Goyal , Jim Walker , DK Joshi , Ajit Ranade , Art Woo .

See more Budget 2012 issue based videos and our Firstpost’s analyses: Subsidies , Fiscal Deficit , Inflation , Taxation , Dissecting the Budget , What Budget 2012 means for markets .