A surprisingly sedate budget

Oops! Just when you’d already written your opening paragraph for this article one day in advance, expecting an election bonanza in the Interim Budget, out comes our Finance Minister with a surprisingly sedate budget. No major tax-structure changes, no duty cuts other than the ones already announced, and no populist measures at the cost of the exchequer. The markets do not seem to have taken much notice either.
But what does the Budget and the announcements that preceded it hold for Gen-Z? Here’s an attempt to analyse.
The Current year’s fiscal deficit was 4.8% of GDP as against 5.6% targeted. And a projected fiscal deficit of just 4.4% next year. Ambitious? Yes, but achievable, not because of lower spending, but because the GDP will grow.
Tax-exemption for power projects extended up to 2012. No more messy wax-candles and emergency lamps during exams we hope!
No tax on income of foreign companies outsourcing work to India. Phew! The goose that lays the golden egg lives to see another day.

Defence modernisation fund of Rs 25,000 crore. Talk peace, but ensure there’s an iron fist behind the velvet glove.
50% of dearness allowance to be merged with basic salary for government employees. Not much impact on us, since not too many of us seem interested in government service anyway, but for those of us with parents in service – this means higher retirement benefits.
Various sops announced for farmers – noble gesture, yes, but based on past record, we wonder how much of these will actually reach the farmers.
Six new AIIMS style hospitals across the country, but wait till they actually come up before you celebrate.
Five-fold increase in the loan-limit on credit-cards for small-scale industry. Could this be the carrot that will wean us away from salaried jobs towards entrepreneurship? But with the de-reservation of a large number of items earlier from the SSI domain, we wonder what’s on the FM’s mind.

Capital-gains tax exemption on shares acquired since April 2003 extended to three years. Meant to fuel a boom in the stock markets, but when was the last time a small-investor really benefited from one?
With this budget the FM has resisted the temptation to fuel the NDA’s election kitty at the cost of the government exchequer by not resorting to profligate gifts. The FM claims we will achieve an 8% growth this year. It’s been 56 years since we’ve been walking on our own feet. Isn’t it time we shed our conservatism and aimed for 10% instead? Just a thought.