The good thing is, at least he is honest about it. There is hardly anything major in this Budget to touch the life of corporations, save a duty cut here and there. On the other hand, salaried employees, senior citizens, women, farmers, SMEs have been given their dose of election year bonuses.
Nobody should really complain. The previous four years belonged to industry and if Chidambaram (or for that matter, any finance minister) needs to deliver on another 5-10 years of sustained economic growth, he/she will have to give in to five-year concessions to vote banks. That is the price for democracy and something the market already buys.
Yes, the markets were down. But 250-500 points have been a very normal phenomenon for couple of weeks now. If there was really a surprise, it was in the form of raising short-term capital gains tax to 15%. That will sadden punters – but with the markets witnessing heightened volatility in the last couple of months, this should not worry the daily punter or short-term speculators.
This is not to say that industry got nothing. Tax holidays for new economy hotels and hospitals in Tier-II cities, a boost to healthcare spending, duty cuts on buses, two-wheelers, small cars, pharmaceuticals, sections of hardware will all have their impact on industrial growth and margins – but in the larger scheme of the mega infrastructure announcements that optimists expected, it will seem to all add up to a whimper.
Having said this, there needs to be a word of caution. Chidambaram has never presented a Budget without interesting fineprint – which means that unless one carefully reads every line of the Finance Bill and the notifications that follow, it will be difficult to take a stand.
The only thing that can derail India’s growth story is an uncertain political environment. If the Budget ensures that we don’t end up with a hung Parliament, Chidambaram would have done the country proud. Hope for the best.
