The Indian Union Budget for 2012-13 was framed in exceptionally difficult times, politically. It therefore needed to attempt only what could be done, for otherwise, the government’s credibility would come into question again.
That limited objective has been achieved, although the decision to make tax laws apply retrospectively in a controversial telecom case is a cause for some worry. For some time at least, FDI may suffer and this is not good for India at all.
The political difficulties of the Government became apparent on March 14 when Mamata Bannerjee demanded the removal of her own senior partyman as Rail Minister because he had attempted tariff reform. It seemed a strange thing to do but the fact is that she doesn’t want to give the CPM any stick to beat her with in West Bengal – and the fare increase was a rather large one.
The Budget for 2012-13 is being framed in exceptionally difficult times. With GDP growth slipping below 7 per cent, the domestic economy is not in good shape and the global economy, barring the US which is showing healthy trends, has become a cause for serious worry.
India faces two major macroeconomic problems: the large fiscal deficit which is a prisoner of competitive populism and its dependence on volatile inflows of money from abroad which can flow out at short notice.
Compounding this is the high inflation, some of which is because of domestic supply shortages and bad monetary policy until a year ago; and some of it is because of high and volatile commodity prices, especially oil.
Positive leadership and inclusive growth are paving the way for India’s future due to successful democracy on an epic scale, writes Radhika Shapoorjee in this article published in September 2009.
When more than 400 million voters went to the polls earlier this year in the largest democratic process in the world, people, pundits, and politicians alike thought they were all a part of the mournful swan song of single-party rule in India – which they expected to be replaced by the jarring notes of a hung parliament and a coalition jamming session.
Worse, some even imagined fragmented third and fourth fronts replacing the two main political parties with a tune played out by communist tenors, caste bands, and communal symphonies.
And the reason for this disharmonious outlook was the negative social environment, recessionary economic outlook, and divisive political scenario that had gripped the nation in its gloomy grasp and was casting a long shadow on its future.
Unlike all other parties in the fray, the Indian National Congress led United Public Alliance (UPA) did not prey on this negative sentiment to win votes. Instead the Congress Party led by Dr. Manmohan Singh, chose to highlight the positive changes taking place within India.
At a basic level the UPA showcased its successful educational, employment, agricultural, and financial programs. On another level, the party showcased overall growth in infrastructure and services across the country, and its orientation towards youth and women.
The decisive vote of the people (click here to read more) >>