Budget 2012: Not budgeting for snap polls

Pranab Mukherjee’s Budget is clear about one thing: His government is intent on not facing Lok Sabha elections before they are due in 2014. For, this is not the kind of Budget to woo voters with.
It must be the only Budget speech under the UPA that does not have a separate section dealing with minorities. Congress cannot be expected to be so casual if it were expecting to face elections immediately.
Besides this significant omission, the Budget negates any prospect of the 2014 polls being brought forward also because of what it contains. Mukherjee had three options: Presenting a revenue budget, making use of the window he had before the 2014 polls; an expenditure budget in keeping with the pattern of schemes like NREGS which cost the exchequer a lot but whose contribution to the economy continues to be questioned, and an attempt to control expenditure.
Mukherjee’s Budget tilts towards being branded the first, with the finance minister opting to mop up approximately Rs 41,500 crore: Clearly not a prescription for those who have to hit the hustings soon. Measures designed for revenue generation, for instance service tax on passenger fares, cannot enhance popularity. However, the buffer generated through them will be helpful when the veteran finance minister has to step up expenditure ahead of the elections.
The finance minister seems convinced that the GDP will grow at 7.5% this fiscal, giving him, along with the revenue mopping, the buoyancy to engage in profligacy ahead of elections. He vowed to fully provide for the implementation of the National Food Security Act, echoing the UPA’s hope that the ambitious, if fund-guzzling scheme, will generate huge goodwill before the upcoming battle for Delhi.
While the emphasis on villages has been par for UPA’s course, the Budget is marked by a conspicuous effort to what Congress and its leaders privately dismissed as an elitist concern. For all its stubborn insistence that the anti-corruption movement was a foreign-funded/RSS-backed political conspiracy, measures to fight black money leap out of the Budget, perhaps betraying the concern that Anna Hazare and his team may have haemorrhaged Congress’s goodwill in urban areas.
However, Mukherjee’s effort, on the whole, is a workman’s budget despite the welcome, if belated, attention on highways — 8,800 km of which are to be laid before next elections are called — and the power sector. It is short on boldness that could have helped generate a positive buzz about the government.
The diminished interest in NREGS which allowed the finance minister to reduce expenditure on the scheme underscored the need for the government to have a new narrative.
Mukherjee seems resigned that it cannot have one, perhaps because the dependence on allies, be it Trinamool Congress or Samajwadi Party, during the rest of the UPA’s term will keep the coalition hobbled. Therefore, he has decided to tax in order to be in a position to spend closer to 2014.
Budget 2012
Budget News 2012