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The Budget target of a 4.8 per cent fiscal deficit for 2013-14 is reasonably realistic. What the finance minister has basically done is increase expenditure 30 per cent, which is not much. So the fiscal deficit target is quite achievable without any real problems.
The primary challenge will be to achieve the revenue deficit target of 3.3 per cent in 2013-2014. This is where the going will get tougher. It is not only ambitious but critical because that will entail a shift in the expenditure pattern. Achieving such a revenue deficit target will require kick-starting big projects, which are currently stalled. So, the projects that will actually bring in the revenue are not there.
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The Budget should have done more to boost India's growth, which has slowed down significantly in the wake of a crisis in the Eurozone.
I, frankly, did not find anything in the Budget that points towards pushing growth. Some allowances here and there will not make much of a difference. The finance minister's tax targets were modest. He also announced measures that will offset the interest rate for corporations but those were never really the real problem. Real growth will come from the substantial number of stalled projects.
The provision to impose a surcharge of 10 per cent on individuals earning an annual income of Rs 1 crore is mere tokenism.
This was introduced only because of the hullabaloo of the government being soft on the rich.
Pronab Sen
Former Chief Statistician
Former Chief Statistician
