Every year, the presentation of
Budget is a much-anticipated event for Indians. It indeed is a bag of
mixed feelings—anticipation, excitement and trepidation; and this year, it was
even more so. For, India Inc. was looking forward to a fresh start on the reforms
front from a government that has been decoupled from the Left forces by the
recent elections. Given the global economic downturn, the nation as a whole was
also expecting fiscal `stimulus' for economic growth in a big way.
Against this background, as the Union Finance Minister presented
his Budget on July 6, saying, "The Congress-led UPA government has come back
to power with a renewed mandate...a mandate for inclusive growth and
equitable development," and proposing
increased spending under several populist schemes meant for elevating common
man__spending under Bharat Nirman up by 45%, allocation under National
Rural Employment Guarantee Act up by 144%, spending under Indira Awaas Yojana
up by 63%, rural health up by 17%, and minority welfare up by 74%, besides a
13% increase in spending to provide stimulus to economy, which cumulatively rises
fiscal deficit to 6.8% of GDP with a proposal to borrow a
whopping Rs 4,01,000 cr, while leaving untouched the important
issues such as how to tackle fiscal deficit and decontrolling petroleum
prices__predictably the Sensex tanked by almost
6%, perhaps, a routine reaction of the market to the non-fulfillment of its expectations.
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