The finance minister has deftly played both hands, after setting the pitch with his 'good politics is good economics' press play over the past few weeks.
While the Budget made some sound sounds, in terms of acknowledging that employment generation and improved credit delivery (notably to agriculture) are key areas for sustainable development, the front end of the speech sounded like an electoral wish list.
Virtually every state was singled out for some honour or another, with the cow belt coming in for most of the attention.
Nonetheless, it was a worthy effort, particularly since it did not have any hysterical give-aways, other than to central government employees.
In the buzz surrounding the pre-Budget it had begun to appear as if the government was getting nervous about its prospects and was going to throw any semblance of sound budgeting out of the window to ensure its return in the polls. The actual effort was not half bad, although some of the revenue projections do look questionably rosy.
For instance, the Budget is targeting an increase of 7 per cent in customs revenues; with imports growing quite nicely at well over 20 per cent year-on-year, this seems reasonable and suggests that there is room for at least a 10 per cent cut in duty rates when the "real" Budget is presented.
On the other hand, the 16 per cent increase in excise collections and the 15 per cent rise in income tax collections appear to be a tall order.
But the 26 per cent increase in corporate taxes that have been budgeted suggests a truly idealistic tax compliance regime.
Perhaps the finance minister's simply extrapolating from the excellent corporate tax collections this fiscal, which turned out to be nearly Rs 12,000 crore (Rs 120 billion), 22 per cent higher than his Budget estimate.
However, budgeting requires some conservatism and a 26 per cent jump (after a 22 per cent rise) is reminiscent of business plans in the dot-com era. Look for a gap of at least Rs 5,000 crore (Rs 50 billion) there.
To his credit, however, the finance minister has lowered his budgeted reliance on "dividends and profits" --from Rs 22,000 crore (Rs 220 billion) this year (which, of course, included the windfall squeezed from the public sector oil company dividends) to just Rs 15,000 crore (Rs 150 billion) in the next fiscal.
There is one rather large -- over Rs 30,000 crore (Rs 300 billion) -- entry under "other capital receipts".
Given that this is nearly 7 per cent of total receipts, it does indicate a need for greater clarity (in an otherwise transparent report).
Significantly, there was over Rs 25,000 crore (Rs 250 billion) budgeted under this head last year as well, of which only Rs 9,500 crore (Rs 95 billion) was actually achieved. Will this be the case in 2003-04?
Turning to expenditure, interest payments will continue to gobble up nearly half of revenue receipts, and this remains a sin that will one day have to be paid for.
While political expediency had made it certain that there would be no tough decisions taken, if the finance minister had made some sound sounds about the deficit, it would have actually added considerable political kudos, since it would have shown the government to be confident about the upcoming elections.
In any event, expenditure cutting is left for another day (as usual). Subsidies have not even been tinkered with, with budgetary provisions rising marginally from last year's huge Rs 45,000 crore (Rs 450 billion), nearly 15 per cent of revenues.
Plan expenditure is up a modest 10 per cent, with energy, transportation and social services (notably education) getting around Rs 4,000 crore (Rs 40 billion) more each.
Certainly, the finance minister cannot be faulted for his priorities -- infrastructure and education are clearly the needs of the hour. I would have hoped, however, that the finance minister would take a leading stand on education.
While the outlays for education in the plan have been enhanced -- 10 per cent for primary education and literacy, and a modest 1 per cent for secondary and higher education -- there have been no processes identified to ensure that these funds are effectively utilised. Creating incentives for education in the private sector should be a defining element in the "real" Budget.
While on process, the considerably detailed focus on credit delivery, reiterating the Reserve Bank of India's position, was heartening, since it confirms the fact that the government, in its heart, believes that the market, if made sufficiently efficient, will provide the best output for a given investment.
Look for more nickel-and-dime changes from the Reserve Bank of India on the credit delivery process as we go forward.
In fact, the only downright bad thing in the Budget was the clubbing of dearness allowance with basic salary for government employees.
Not only is this cravenly political, it commits the government to future payouts (as higher basic salary will lead to higher pensions and so on) into the infinite term.
For the markets, the capital gains exemption and the cut in stamp duty were good, if modest, moves, as was clearing the air on the prospects of taxing global companies who outsource business to India.
The creation of international airports (when? when?), easing baggage rules, building convention centres, and starting to focus on the needs of cities are signs that the government understands that business travel and tourism are key components of the new India.
All in all, Jaswant Singh has delivered a straight-ahead business-as-usual Budget, incorporating his belief that good economics is good politics. Or was it the other way around?
The writer is the chief executive officer, Mecklai Financial and Commercial Services Limited.