Dream Budget 1997. Focus on the corporate sector through a slew of measures, tax and otherwise. Recognizing the need to speed the growth of industry, Finance Minister Chidambaram moved on multiple fronts to build a competitive industrial sector, give financial resources to corporates, enable cheaper imports, enhance shareholding, minimize the rigours of exchange control and incentivise investments in corporates.
Budget 2004. Another dream budget. A different time. A different dream. A multi-pronged attack on food, agriculture and the rural economy to enhance their growth, livelihoods, quality of life and purchasing power. These, in turn, will reinforce the industrial economy, generating demand growth in the country for products and services. 2004’s Budget will be remembered for its enormous focus on the 600 million people living in over 600,000 villages who have to be brought into the mainstream of the economy.
If the 1997 Budget speech was primarily directed towards industry, the 2004 speech was targeted at agriculture. In fact, the first 30 minutes of the Finance Minister’s speech was on the rural economy in its various aspects. He came back to it again, later in the speech, when covering measures relating to water, taxes, etc.
A second difference was the considerable attention, this time, rightly, to education and health - the social sector. Primary education, mid-day meals, health, HIV-AIDS, vocational education, micro-finance and entrepreneurship building, Insurance, educational finance, drinking water, low cost housing were areas of priority focus in 2004 with a strong sense of seriousness. This was another major difference in terms of the profile given to these issues in the Budget. Clearly, a new determination to bring about a turnaround in the social sector development of the country.
For Industry, and investment, the FM announced new structures including for the public sector. And, very importantly, remembering the fact that India is now operating in a globalised world, and the world was keenly observing the Budget, the FM happily raised the FDI limits on three key sectors which are fundamental to infrastructure development across urban and rural India as well as provision of insurance services to the masses of India.
A second difference was the considerable attention, this time, rightly, to education and health - the social sector. Primary education, mid-day meals, health, HIV-AIDS, vocational education, micro-finance and entrepreneurship building, Insurance, educational finance, drinking water, low cost housing were areas of priority focus in 2004 with a strong sense of seriousness. This was another major difference in terms of the profile given to these issues in the Budget. Clearly, a new determination to bring about a turnaround in the social sector development of the country.
For Industry, and investment, the FM announced new structures including for the public sector. And, very importantly, remembering the fact that India is now operating in a globalised world, and the world was keenly observing the Budget, the FM happily raised the FDI limits on three key sectors which are fundamental to infrastructure development across urban and rural India as well as provision of insurance services to the masses of India.
In all these sectors, there is urgent need to harness massive additional resources, especially finance, as well as new technologies and products to support the growing needs of the people of India. This was a strategic initiative, not across the board, but focused on priorities for high-speed development with widespread benefits from the transportation, insurance and telecommunications industries.
There are many other positive. Few negatives. The important issue is to create a new delivery system for implementation to ensure that wherever Budget allocations are made and schemes have to be operative, the carry through is via new means of decentralized working.
All in all, a fine Budget, done in four weeks and extremely comprehensive in its coverage and quality.
(Tarun Das is chief mentor, Confederation of Indian Industry)