Nothing pathbreaking, only conservative accounting exercise

The announcements on agriculture, food processing and logistics are a teaser for state governments to follow up with programmes that would then get some Central funding. Medical schools attached to district hospitals on a PPP mode might lead to greater interest in setting up medical colleges by the private sector, especially in Tamil Nadu.

In the same vein, encouraging education, skill development, and specific vocational programmes may enthuse private players to venture into these areas, and again Tamil Nadu has a history of such entrepreneurship.

The Economic Survey which was presented in Parliament just a day before contained many new ideas, and spoke refreshingly of a market-driven economy, where wealth creation and entrepreneurship would be rewarded, crony capitalism would be replaced by free markets with equal opportunities for all, inefficient public sector units would be sold. However, the Budget has not taken up any of these for implementation, and the disconnect between the reformers and the pragmatic accountants in the government appears to be widening.

To be fair, in the past, the Modi government had reserved its major programme and implementation announcements outside the Budget, relegating the exercise to a safe, conservative, accounting exercise. Clearly, this year is no exception. In part, it stems from a mindset where major announcements are made by the executive, most often the Prime Minister, whereas putting it inside the Budget would entail parliamentary scrutiny and discussions. Secondly, this is not a government committed to reform, and in many ways, allows politics and the voter to take a call on economic decisions.

For example, the super-rich tax introduced last July for those with income above Rs 2 crore would net hardly Rs 5,000 crore, but the superficial impact of taxing the wealthy for their riches would have bode well for the votebank. There is little difference in perception of voter politics between this and the Indira Gandhi era, both keeping their eye firmly on the electorate. Therefore, there is little room for right wing ideas or ideology in their actions, and this Budget reinforces that.

The announcement that there would be an IPO for LIC is welcome. It has emerged as single institution to bail out government by investing in difficult accounts like the IDBI bank and through paying large dividends to the government. As a result, it is also showing some signs of stress. Infusion of public shareholding would infuse transparency, accountability as well as capital into this undertaking, whose customers run into crores. Disposing IDBI bank through retail share sale is also a good idea.