#dnaEdit: Advising Jaitley

The pundits have been quite eager and anxious to tell finance minister Arun Jaitley as to what he should be doing, and they have been doling out unsolicited advice rather liberally. Most of the pundits are right-wing liberals — the new buzzword — who believe in the virtues of a free market economy and they want the finance minister to deliver ‘big ticket’, ‘big bang’ reforms. What they have in mind is mega infrastructural projects and huge public investments to be given to private sector players. They feel that  this is indeed the best way of kickstarting economic growth after the UPA II’s ignominious performance in running the economy aground with its scams and policy paralysis. 

Unfortunately, there is not much that Jaitley can do with these dollops of economic counselling. The budget papers must have been printed by now, kept under seal in the finance ministry in the North Block. All that the finance minister has to do is unwrap the speech and read it out in the Lok Sabha on Saturday morning. There are really no last-minute changes in the Budget, except corrections in spellings and in construction of sentences, as shown in the customary photograph showing the finance minister turning the pages with pen in hand. It is slightly comical that pundits should be buttonholing the finance minister and forcing him to hear them out. Jaitley and his ministry officials had done their bit of consultations before they got down to the preparation of the budget. There is nothing to be done this week.

It is also not realised in the dress circle of pundits that Prime Minister Narendra Modi, Jaitley and the rest of the BJP-led NDA government are keen to implement their own economic ideas, and they seem to have a lot more than what the experts can tell them,  but they will not be able to do all they want to because of the ground reality. Though president Pranab Mukherjee in his address to the joint session of Parliament on Monday had used the new figures issued by the Central Statistical Organisation (CSO) to state that the economy grew by 7.4 per cent on 2013-14, economist Arvind Panagariya, the deputy chairman of Niti Aayog, was more guarded when he said in an interview to a newspaper that there were “green shoots”. Those in the government who know are quite aware that the Modi government first full-fledged Budget is not being written on a tabula rasa. The Prime Minister and the finance minister may still want to taunt the Manmohan Singh government for the troubles in the economy, but this will be the last time they will be able to indulge in that kind of rhetoric. The NDA’s time to do what it wants to do with economic policy starts now and the time for alibis is over.

Jaitley’s budget has to be perforce realistic. He has the elbow room to restate the general economic philosophy of the government, but his announcement of projects, schemes and tax proposals will depend on the actual state of the economy. He would be tempted to keep taxes low and prune governmental expenditure in order to provide the stimulus for brisker economic activity, but it would not guarantee that the economic will start buzzing soon after the Budget speech. There is guarded optimism in the air and an equal amount of scepticism about the state of the economy.