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A Critical Budget
The Budget for 2001-2002 was particularly critical in view of the quite dismal picture of the economy painted in the government's own Economic Survey. It was important for the government to give policy directions through the budget in order that the economy can meet the challenges that it faces in the integrating world economy. How far has this been done?
Vashwant Sinha’s Budget for the year 2001-2002 would be remembered for the manner it has sought to step out of the convention and to acquire a new look. The budget speech of the finance minister appears to set the agenda for the Vajpayee government as it enters its fourth year. Several key policy decisions have been announced in the budget speech, which include the controversial reform of the Industrial Disputes Act and a re-look into the drug price control order. By so doing, the finance minister seems to have taken on the responsibility of pushing the ministries that have been somewhat reluctant to take decisions on the more vexed issues. But while he may have done a yeoman’s job for the government that has taken up the economic reform agenda with zeal, the implications of making announcements on behalf of other ministries may turn out to be more complex than might appear at first sight.
It is the interests of the Indian industry that the finance minister has clearly focused on while making the pronouncements in his budget speech. Besides proposing unshackling of controls on several fronts, the finance minister has brought further cheer to industry on at least two counts. In the first instance, the degree of border protection afforded to the industry via import tariffs has by and large remained unchanged, thus assuaging their fears of the ‘Chinese invasion’. The second cause for comfort for industry is the set of measures taken for lowering the cost of borrowing.
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