Comment

How is it that our ultra-nationalists haven’t yet discovered that the Budget is a relic of Empire?

As it happens, until recently Finance Ministers would present the Budget after 5 pm. It was assumed that this wasto avoid knee-jerk reactions from the stock markets till someone found that the evening was chosen by the British only because of the time difference; it was to ensure that British parliamentarians could be comfortably in their seats when the FM’s speech began. That our Budget had been timed to suit the convenience of the imperial power was bad enough; but continuing that tradition so many years after Independence was truly embarrassing: we now start sensibly in the morning. But, surely, the Budget itself is a colonial relic: the left-over legacy of the Empire laying down the law once a year to one of its colonies?

The smallest economic unit in a country is the family. Does it draw up a budget for the year to come, or does it do the more sensible thing of doing occasional reviews, and making adjustments to expenditure heads as incomes and prices fluctuate? If you take a larger unit, which is a corporation, its annual general meeting is essentially to inform its shareholders of the company’s performance during the past year.No Board of Directors would be foolish enough to announce its future plans; it leaves itself the flexibility to change according to performance and circumstances. If that is so for these smaller units, how much more relevant is this gradual and calibrated course of action for a whole country where hundreds of things can (and often do) go wrong, or at least change?

As things stand, this once-a-year event draws national attention to itself on the scale of the Kumbh Mela. But does the Finance Minister need this moment in the sun? And does the attention the Budget gets benefit anybody?

Except, of course, the media. The daylong Budget programmes are one of the biggest events for the media, second only to a general election. Newspapers and TV channels pull out all the stops including pre-budget speculation andpost-budget post mortems. On the day of the Budget, anyone with a designation and a suit is hauled into a studio. Many suits have been around long enough to be due a gold watch, but they have pretty sharp minds. You can see that from their instant opinions on a budget which has taken country’s best financial brains months to prepare.

The only problem is that all these clever brains come from the same mould : they speak for you and me, and sometimes for them and them only which isn’t even you and me.

For the man at Morgan Stanley or some such, a Budget like this year’s which emphasises agriculture, and gives greater outlays to health and education is “populist” or “driven by political compulsions”. Farm credits or fertiliser subsides or greater allocations for water in distressed districts are seen as burdensome subsidies, so what if they succeed in reducing farmer suicides? You saw this in the wide-spread criticism of the FM for not having done enough for the stock market :

Prannoy Roy: Don’t forget you have a constituency of eight million investors in the country.

Chidambaram (with a tight smile): I also have a constituency of 600 million farmers.

None of this changes from year to year, and none of this will change in the future. After all, the typical farmer, unlike the typical investment banker, cannot do large sums or articulate his needs fluently. Which means that a Budget which addresses the needs of the majority of the country, is likely to get pilloried by the minority which has access to the media. In other words, a Good Budget will get such a hammering that it will, in the public perception, soon sound like a Bad Budget.

That’s another argument for doing away altogether with this annual exercise in futility and replacing it by policy changes as and when the need arises, right through the year. That will bring in specific legislation when it’s urgently needed, rather than waiting for the Annual Big Bang Media Event.