Happy 85th Birthday Union Budget!

What do you do when you turn 84?

Retire gracefully to enjoy the sunset of life! Or, soldier on to climb another milestone? Come to think of it soldering on might not be a bad idea today; especially when expectations abound about your next move. The talk here is not about any octogenarian surviving on borrowed crutches but about a ritual and an event that has come to be an important part of our nation’s existence.

When finance minister Arun Jaitley rises on the floor of the House on July 11 to present his maiden union budget, it would be the 84th budget of India. So, is it passing of yet another ritual or an opportunity to reinvent the thought behind presenting the budget? Budget is an annual event conducted with great fanfare with all the melodrama associated with the launch of a Bollywood blockbuster. Then hype though has often belied expectations with budget being largely unable to connect emotionally with an average Indian. It, however, remains a must watch event for economists, politicians, policy wonks, and most importantly for India Inc. For the common man at best it comes with a blend of fear and excitement about the wallet dynamics. Right or wrong even ardent supporters of the annual account statement of the government of day have argued for either retiring budget or most certainly de-hyping it.

The biggest argument for retirement being the increasing tendency of government of the day to announce key policy decisions either ahead of B-day or post budget presentation. This indeed has left the budget shorn of much solid content with mere statistics dominating the proceedings. But can the trend be reversed and we have a budget this time that promises to redeem countrymen of the sub five per cent growth level? Or, even better re-ignite the double digit ambition? NDA2’s first budget, which many would like to christen as Modi’s budget, has to be historic.

The timing is perfect for turning a ritual into a life changing event for the country and its billion plus people many of whom voted for a change. The man of the moment aptly summed the sentiment. Finance minister intervening in the debate on motion for thanks for the Presidential address said, “The results have demonstrated that unlike previous elections, this election is not about the arithmetic of alliances. This was more about the changing chemistry on the ground.” Quite right for budget too! It is not about arithmetic or accounts but about intent, execution and outcomes.

Modi & Jaitley have a highly acclaimed budget template in front of them. The ground situation too is not strikingly different (save forex reserve level). On July 24, 1991, Dr Manmohan Singh made history when he unshackled Indian economy from the precipice of a disaster to launch a new phase of revival and growth. Presenting his maiden budget, Dr Singh had said, “The new Government, which assumed office barely a month ago, inherited an economy in deep crisis. The balance of payments situation is precarious. International confidence in our economy was strong until November 1989 when our Party was in office.” The similarities here are ironic.

Jaitley in his motion for thanks speech averred, “UPA government inherited 8.57 per cent growth rate. It is leaving behind a growth rate of sub 5 per cent for two consecutive years. The fiscal deficit is abnormally high at 4.5 per cent. Inflation in April is at a high of 8.9 per cent. Tax buoyancy has suffered. Tax GDP ratio is at 10.1 per cent as against budgeted 10.8 per cent. We have seen a decade of jobless growth. The credibility of the Indian economy has been hurt. Investors had stopped looking at us. Investments cycles both domestic and international have been broken.”

There is no point moaning the missed opportunities. In each challenge ahead lies a capable opportunity. A beginning has made by an emphatic vote in favour of stability, development and growth. The markets, somewhat volatile in view of Iraq crisis, have been positive, and the overall sentiment is bullish. It is relevant to go back here in history and revisit Dr Singh’s famous maiden budget speech. “I do not minimize the difficulties that lie ahead on the long and arduous journey on which we have embarked. But as Victor Hugo once said, “no power on earth can stop an idea whose time has come.” I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea.”

The wait has been long and stressful! Time is ripe to secure the place India deserves in the galaxy of nations. For more, look forward to a hale and hearty 85th birthday of Union budget!