THE RIDDLES OF BUDGET MAKING Faisal hashmi (March. 07,2007)



Honestly, figuring out the budget is not everybody’s cup of tea. Different people look at the same budget differently. Alternatively, the same people look at it in different ways at different occasions.

Naturally, the budget is primarily looked at from class angle. That is, everyone first thinks of how it is going to affect his or her class of people, those in the same income bracket, business, profession, even caste and community.

We have an interesting example in the corporate sector’s reaction to the Union Budget 2007-2008. Initially, quite a few of the leading lights of India Inc. thought that the budget was "disappointing" and lacklustre. At least that is what they told TV anchors soon after the budget presentation.

However, when some of them came face-to-face with Finance Minister P. Chidambram at a meeting in New Delhi, he asked them a few pointed questions, which showed that they found the budget excellent. They even said so collectively.

Chidambram told the industrialists: "Those who don’t agree with the following provisions in the budget please raise your hands." He then proceeded on with those provisions: creation of one lakh jobs for the physically challenged, scholarships for one lakh children and allocation of more money to combat HIV/AIDS.

Nobody raised his hands to oppose these provisions. Then he took a dramatic turn and asked them to raise their hands if they opposed the following provisions: funding for the completion of polio vaccination programme by December 2007, the appointment of two lakh teachers next year, the creation of half a million class rooms in 2008. Nobody raised his hands to oppose the provisions. And everybody said it was a good budget.

A similar conundrum marks the budget allocation for minorities. A day before the budget a major newspaper reported that Chidambram has trebled the budget allocation for minority affairs ministry, compared to last year’s provision, which now stood at Rs 500 crore.

But the figures do not seem to tally with actual allocations. In any case it’s pittance compared to a provision of Rs 3,271 crore for schemes benefitting only SC/ST communities, besides Rs 17,691 crore for schemes in which 20 percent of the beneficiaries are from SC/ST background. Then, there is another Rs 790 crore in scholarship for SC/ST children.

The budget envisages a special plan for districts with high concentration of minorities. However, there is no specific identification of those districts, which leads some to complain that it is good enough to elicit charges of "minority appeasement', but not good enough to make any difference as far as minority lives are concerned.

IOS Current Affairs asked Dr Ausaf Ahmad, an economist till recently associated with Islamic Development Bank in Jeddah, to elucidate. Dr Ahmad has been a keen watcher of the Indian economic scene. [See: Economist’s Perspective]


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