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Budget 2013: A run-of-the-mill affair

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(Any opinions expressed here are those of the author and not of Reuters)

After the sustained hype of a game changer budget, Budget 2013 was a totally run-of-the-mill affair with no announcements of any kind of deregulatory or growth propelling initiatives.

True enough, some of the more promising measures taken in the last 12 months were not related to budgetary statements. Not surprisingly, the Sensex greeted Budget 2013 by falling.

Going forward, what may sustain the equity market is further improvement in inflation which may allow the Reserve Bank of India (RBI) to cut rates again.

Rather than recount the usual mix of tax rises (surcharge on high incomes) and minutiae such as  removing excise duties on handmade carpets but adding an extra 3 percent excise on SUVs because “they occupy more parking space”, here are some points of more macro substance:

Budget 2013: A high-calorie budget

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(Any opinions expressed here are those of the author and not of Reuters)

India’s left-leaning government believes in the ‘eat more, burn more’ philosophy in managing its finances. Budget 2013 takes that idea further with an even stronger projected rise in spending.

If the increased spending is aimed at productive use, it may still end up doing some good. But the track record does not inspire confidence. I hope that after talking the talk, the finance minister will not lose his nerve when it’s time to walk the walk.

Budget 2013 does have some words of wisdom

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(Any opinions expressed here are those of the author and not of Reuters)

The finance minister had a tough job in hand with this being the government’s last budget before elections due in 2014. P. Chidambaram had to focus on fiscal consolidation while walking a tightrope between populism and pragmatism.

In my previous column, I had written about the issues he needs to address. Here’s a look at how Budget 2013 fared on these counts.

Budget 2013: An opportunity missed

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(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

Industry leaders have hailed Budget 2013 saying that this is the best Finance Minister P. Chidambaram could have done under the circumstances. Opposition leaders have slammed the budget. Each had their own compulsions but I feel the truth lies somewhere in between.

Budget 2013: Visible impetus on growth

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(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

Finance Minister P. Chidambaram presented the annual budget at a time when India’s economy is going through a challenging period. India faces the four-pronged problem of high fiscal deficit, an unacceptably high current account deficit, declining growth and lower savings.

South China Sea: The zero-sum game

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(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

The Chinese have shown far greater alacrity in resolving disputes over land boundaries with neighbours than in drawing lines across international waters that they claim. A nation with land borders with 14 countries has settled its disputes with 10 of them, but finds it difficult to resolve its problems in the South China Sea.

Budget 2013: Balancing fiscal prudence and populism

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(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Reuters)

With a four-month equity rally showing signs of fatigue, the focus is on Budget 2013 to provide further impetus.

India Markets Weekahead: Prudent to wait for the budget

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(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

After showing promise early in the week, the markets turned gloomy on Thursday with a sharp correction, ending the week with a 0.63 percent fall at 5850 – close to the support levels of 5840 which hasn’t been violated on a closing basis.

Budget 2013: Time for a responsible budget

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(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

Finance Minister P. Chidambaram has promised a “responsible” budget this time around. According to Webster’s dictionary, “responsibility” is associated with a legal or moral accountability, reliability, trustworthiness in relation with some burden.

Budget 2013: Eye on short-term and long-term objectives

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(Any opinions expressed here are those of the author and not of Reuters)

India’s annual budget always attracts a lot of interest and this year’s edition will be especially important. Budget 2013 is not just significant because it’s the last to be tabled before parliamentary elections due next year but also in light of economic headwinds.

Areas that require immediate attention include the need to invigorate investment, pacify rating agencies, lower subsidies, address structural bottlenecks and jump-start domestic growth. This will require the administration to make tough choices. A turnaround in investment, in particular, is unlikely in the short term.

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