Like the proverbial trees, much of the commentary on the Budget has obscured the real wood. The numbers have been scrutinised, as they should be. The Budget has also been analysed for its reform potential and for what it does for specific activities.
This Budget - as indeed any Budget - needs to be assessed against the overarching goal set, for how it reads the current situation, how it proposes to deal with it and what resources it has to implement the strategy. This last includes both funds and administrative capacity. Reforms, if needed, could at best be a collateral result, not the prime objective.
Read our full coverage on Union Budget The Economic Survey has been the major source of ideas for the Budget. The very first chapter of the two-part survey identifies the key parameters. It refreshingly terms the present situation as that of a recovering economy, despite the optimistic new macro-numbers. Creating opportunities and reducing vulnerabilities are the overall driving forces to focus on. Rapid, sustainable growth that also "lifts all boats" is the desired objective.
The Budget matches the sharp diagnostics in the survey with its proposals: the universal housing and connectivity and safety nets to reduce vulnerability, additional public funds to get the infrastructure projects going to spur private investment, and a clear road map for ease of doing business. The rationalisation of direct corporate taxes and roll-out of the goods and services tax, both proposed from the next year onwards, are unequivocal statements of intent. They are not sudden surprises, which ought to be seen as welcome changes in government functioning.
Hasten slowly seems to apply to other expected changes, such as reducing government role and expenditure. This is an acknowledgement of difficulties in bringing about a change in procedures and mindsets, of officials and lawmakers, who must approve enabling legislations. Becoming a facilitator from being a controller is easier said than done. The government already faces a hostile opposition, especially in the Rajya Sabha, even for its current enactment agenda. The battle for the Budget 2015 is only the first one of the many to follow, and the government seems to have realised the need to conserve its political capital to achieve the rest of its agenda over its term.
This pragmatism is reflected in the rationalisation of subsidies as well. The reduction in the Budget, is only because of falling crude prices. Input subsidies have not been changed much, albeit the survey clearly identifies the negative consequences of price subsidies.
I had said in these pages just before the Budget that the expectation of dramatic changes in subsidies was unrealistic since everyone in India is an agrarian champion. These are the bad cholesterols that the body economic accumulates. The Budget has dealt with it by offering the statin of direct transfers through using what the survey rather felicitously terms the "JAM" (Jan Dhan, Aadhaar and mobile) trinity.
The Budget is realistic in other ways also. To its great credit, it anticipates for the next year only a small increase of half to one percentage point to the current growth rate. Revenue projections are based on this anticipation and those in turn determine the expenditure. Naturally, this disappoints those who wanted greater spending on investments or social heads of development, but to use a cliche, a prudent tailor cuts the coat according to the cloth. There have been too many slippages between Budget projections and actuals in the recent past. Lower expectations are far preferable to disappointments a year hence. As good faith, the finance minister has promised added outlays should the prospects improve.
"Big Bang", the term commonly associated with desired reforms, is a borrowing from cosmology and refers to a singularity when the universe started expanding. In a neat semantic fit, the Indian economy has also had a singular Big Bang since Independence. That was in 1991, when the entire policy mindset and parameters changed. All other changes since then have been attempts at refinements and additions, but not on par with those tectonic changes. That is as it should be, because the economy has not been in the kind of crisis it was in when P V Narasimha Rao and Manmohan Singh ushered in the dramatic changes. The survey rightly observes that "Big Bang reforms occur during or in the aftermath of major crises".
According to one commentator, the survey stated that creative incrementalism it had advocated added up to big-bang reforms, which he then contradicted. That is incorrect. What the survey says, in fact, is that "Big Bang reforms as conventionally understood are an unreasonable and infeasible standard for evaluating the government's reform actions" and advocates incrementalism in their place.
One area of some regret is that despite the engaging analysis of the agricultural situation - read its stagnation and immiserisation of the peasantry - there is little beyond the traditional token sops to the sector. But then agriculture has been an area of neglect - and not always benign at that - in all the years since its own Big Bang of Green Revolution.
No matter. What Budget 2015 does is to deliver bang for the buck, a term in vogue since the 1950s, which refers to value in exchange for money or effort. This Budget indeed delivers that to a large extent.
The writer taught at Indian Institute of Management, Ahmedabad, and helped set up Institute of Rural Management, Anand