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Straight from the Specialists

Budget 2013: Chidambaram’s chance to bell the cat

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

This year’s budget will be an interesting one and it will hopefully be more pragmatic than populist.

Not much has changed since Pranab Mukherjee presented the budget in 2012. At the time, India was battling high inflation at 9 percent, fiscal deficit at 5.9 percent of GDP and a current account deficit (CAD) at 4.2 percent of GDP.

In the run-up to Budget 2013, although inflation has eased, fiscal deficit at 5.3 percent of GDP and CAD at 4.6 percent of GDP does not augur well for the economy. Also, the consumer price index remains high due to food inflation.

Though the Feb. 28 budget will be the last before elections due in 2014, the populist decisions of 2008 may not feature in it this time.

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