Power Of 3: Team Vision weaves another dream

NEW DELHI: Imagine getting Sachin Tendulkar, Brian Lara and Adam Gilchrist to bat for the same team... On February 28, finance minister P Chidambaram will deliver a speech that is likely to be long on line, length and vision.

After all, it’s got Prime Minister Manmohan Singh looking at every little detail, deputy chairman of the Planning Commission taking care of infrastructure and the man with the Midas touch, the FM himself, hoping to deliver what’s best for you, the economy and the stability of the ruling coalition.

Keeping stumps is the formidable woman behind these men — Congress president and the third most powerful woman in the world, Sonia Gandhi. The brief for these uncommon men and woman is to make sure that the Budget stays in line with what’s enshrined in the Common Minimum Programme (CMP), without letting go of some genuine masterstrokes outside the ‘Left’ stump to score some big wins for the markets and the corporate sector.

With assistance from a battery of the best and the most high-profile bureaucrats, the Dream Team will decide how much you will pay in tax, what you will spend on household expenses, what’s the next big opportunity for entrepreneurs and business executives, what’s in store for the markets and the economy.

Just who are these men and woman behind this mega exercise — Union Budget 2005-06 — and who’s chipping in with what? ET takes you through the corridors of North and South Block, 7 Race Course Road and the destination where all roads eventually lead to — 10 Janpath.

In recent weeks, the original Sardar of reforms has spent long hours discussing details of Budget 2005-06 with Mr Chidambaram. The two have been meeting 3-4 times a week, spending hours over coffee and conversation, discussing the contours of the budget.

The dream team of Mr Singh, Mr Chidambaram and Montek Singh Ahluwalia has been driving the whole process over the past several weeks.

As deputy chairman of the Planning Commission, Mr Ahluwalia has been meeting the PM at least 3-4 a week. Mr Ahluwalia is said to be closely co-ordinating with Mr Chidambaram to give effect to the PM’s ambitious urban infrastructure upgradation programme covering a large number of small cities. Anything up to $10bn could be spent on these projects over the next five years.

The CMP remains the Bible which the PM reads to his relevant Cabinet colleagues at the time of budget-making. So with three most experienced hands running India’s fiscal affairs, you can expect the coming budget to be long on both the CMP’s vision and details.

Budget 2005-06 will be far from a ritual exercise — this was the tacit message given by Mr Singh nearly six months ago when he spoke of initiating big-ticket tax reform measures. The groundwork for this exercise began some time at the end of October after top-level appointments in the finance ministry.

Traditionally, the broad policy contours of the budget come from the PMO, based on which specific taxation proposals are formulated by the finance ministry.

This budget is no different, with Mr Singh committed to delivering the promises made in the CMP through the budget. “Consensus building� is the name of the game, as both the PM and the FM would like to ensure that the budget proposals are passed by the Parliament, without any roll-back.

Unlike the first budget presented four months after the UPA assumed office, the FM and his team have had sufficient time to analyse tax policy proposals of various expert panels, including the Kelkar Task Force on Implementation of the Fiscal Responsibility and Budget Management Act.

Inputs have been pouring in from other important quarters as well, including the high-profile National Advisory Council (NAC) and the Economic Advisory Council (EAC). One big input that came from the NAC was the draft employment guarantee legislation which has been passed by the government in a somewhat truncated form.

The brain behind the legislation was none other than economist Jean Dreze, said to be close to Ms Gandhi. The mandate of the NAC, chaired by Ms Gandhi, is not just to provide inputs for policy formulation, but also to keep a tab on implementation of the CMP goals.

The EAC, mainly comprising economists, is another body providing intellectual inputs to the PM. Several brain-storming sessions have been held with the EAC, chaired by C Rangarajan, and it has members such as Govind Rao, GK Chadda, Saumitra Chaudhary and SD Tendulkar. The FM is understood to have taken the council into confidence on some of the key budget proposals to obtain a feedback.

Mr Chidambaram kicked off the budget exercise with formal pre-budget meetings with industry, farm leaders, trade unions and economists. The interaction with trade unions was a proactive one. So was the one with the Left parties on their pre-budget wish list.

Even at the official level, senior Left leaders have been sounded out on important issues. The FM wants to avoid possible criticism from the Left that it was not taken into confidence.

The consultation process has been wide-ranging this time, with the FM holding parleys with several of his ministerial colleagues on sector-specific issues. Key policy inputs — besides the core issue of gross budgetary support — have come from Mr Ahluwalia.

At the finance ministry’s end, Parthasarathi Shome, advisor to the FM, has been entrusted with the task of analysing the pros and cons of every taxation proposal, based on ideas from the tax research unit and the tax-planning and legislation divisions.

Mr Shome is a member of the core budget team, along with DEA secretary Rakesh Mohan, revenue secretary KM Chandrashekar, expenditure secretary D Swarup and the chief economic advisor Ashok Lahiri. All policy proposals are deliberated by the core budget team before they are put up to the FM.

The Boards — the CBDT and the CBEC — have, by and large, been distanced from policy-making this year. Here, the FM seems to have acted on the recommendations of his former advisor, Vijay Kelkar, who made out a case for entrusting only administrative functions to the two boards.