Indian Budget, How useful for Indian consumers

The optimists hoped that it might show the Indian economic miracle was back on track. Pessimists feared it would show a country descending into wild populism ahead of a general election due by mid-2014. In the event India’s budget day on February 28th was barely enough to stir India’s octogenarian Prime Minister, Manmohan Singh, who sat in parliament with his arms folded and eyes closed, as his spritely colleague, Palaniappan Chidambaram, the finance minister, trod a terribly fine line.

Most will have to pay at the old rate though the small taxpayers — those whose income is between Rs 2 lakh and Rs 5 lakh — get relief through a tax credit of up to Rs 2,000. This will benefit 1.8 crore people. Falling in the ambit of the rich tax will be 42,800 large tax payers.

While imposing the 10% tax surcharge on those with incomes above Rs 1 crore, the finance minister invoked the Azim Premji 'giving away' spirit. However, though he did leave the rich a little less rich, it wasn't as if he was distributing largesse to other taxpayers.

Following are highlights of the budget: 

• ·         India faces challenge of getting back to its potential growth rate of 8 pct 
• ·         India faces challenge of getting back to its potential growth rate of 8 pct 
• ·         India must unhesitatingly embrace growth as highest goal 
• ·         India faces challenge of getting back to its potential growth rate of 8 pct 
• ·         India must unhesitatingly embrace growth as highest goal 
• ·         Growth rate under UPA was highest 
• ·         Between 2004 and 2008 and again in 2009-10 and 2010-11 the growth rate was over 8% 
• ·         There is no reason for gloom or pessimism 
• ·         Global economic growth declined 

Growth: For growth He said that India faces challenge of getting back to its potential growth rate of 8 pct. India must unhesitatingly embrace growth as highest goal.

Current Account Deficit: India's greater worry is the current account deficit - will need more than $75 billion this year and next year to fund deficit.

Power and Energy sector: This sector Proposes zero customs duty for electrical plants and machinery.

Agriculture: To allocate 801.94 billion rupees to rural development in 2013/14.

At least, however, a sense of restraint is now in place. That much Mr Chidambaram has achieved. Whether he made any difference to the bottlenecks that are holding back growth is far less sure. On the Goods and Services Tax, vital to sorting out the public finances in the long term, he promised he would bang heads together. He committed to looking at ways of getting the private sector in the coal industry, which is state owned and producing far too little of the black stuff. The truth is, though, that on meaty problems such as these he simply may not have enough time before the general election to make a big difference.

In just over a year, perhaps less, a new government, and perhaps a new finance minister will be in place. And for all Mr Chidambaram’s efforts, the commitment to economic reform among the political class may be skin deep. As he spoke in the chamber, most spending rises were cheered and met with a thumping of desks, not least by Sonia Gandhi, the dynast who heads the ruling congress party. Mr Chidambaram’s pledges on improving the investment climate and attracting manufacturing investment, however, were met with icy silence.