Budget 2009

India’s new Finance minister Mr. Pranab Mukherjee gave a historical budget speech under the guidance of Dr. Manmohan Singh. Critics may have expected more and wanted more. But the fact is it is one of the most balanced budget in last few years. As the economy progresses and gets into the development phase, the Budget is an annual exercise and not phenomena. In current times of coalition Govt., the Govt. deliberately keeps the critical issues off the Budget speech to come for criticism from its allies which can be taken care off during the year. The current brouhaha of the global economy has swept across the bigger and smaller nations, India is one of the few nations in the world whose GDP target has been revised in the upward direction by World Bank. Take notice of it.

As I had mentioned earlier, critics will later laud the efforts of the Indian Govt. to prevent global crisis from reaching the shores of Indian nation. There can always be argument for doing it better probably, but then the way it has been handled is remarkable, it could have gone otherwise.

Industry experts and players are always expecting more and more tax cuts from the Govt. Take the case of IT companies they enjoyed tax holiday for ten years, extended by one year in 2008, extended by another year in 2009, they wanted a straight five year holiday. The industry has taken its share of benefits from the tax holiday. We have Infosys, Wipro, TCS, Mahindra Satyam and couple of other mid-tier IT companies to boast of. The Govt. performed its part. Now let this benefit to be passed on to some other space to create another exceptional story out of India.

After two stimulus packages, they want more tax cuts. Then from where the Govt. is going to meet its expenditure. The revenue has clearly fallen, the fiscal deficit has shot through the roof and even jeopardizing the FRBM Act. But it is not new to India especially in 1990’s revenue target not being met. But the golden moments went to the expenditure which always went way above the targets as if your mistress has taken charge of your purses. We managed to check our expenditure.

Mr. Mukherjee very rightly mentioned, let the global economies recover then we will definitely look how to tackle the issue of revenue and fiscal deficit. We are aware of the same.

I strongly believe with my little knowledge that it is indeed a very balanced Budget in such times of economic globally.

The media questioned Mr. Mukherjee, Sir why did the market went into tizzy when you concluded your Budget speech.
I guess because Markets are inverse function of knowledge.