Newspapers slam Budget as unimaginative

Newspapers on Friday slammed the 2002-03 Union Budget unveiled the previous day as unimaginative and proposing too little to turn around the slowing economy.

"It is a Budget that hurts everybody, unless of course you are a non-resident or a foreign company," said the Times of India.

"A harsh Budget was perhaps necessary to kickstart the economy. But what Finance Minister Yashwant Sinha has delivered in his fifth Budget is pain without the prospect of gain."

The Business Standard was only slightly less damning.

"There is a great deal on offer in the sector-specific initiatives, but to the key question of what the Budget does for speeding up economic growth, the answer that suggests itself is: Not enough."

"Unimpressive budgetary numbers...hang somewhat precariously on the hopes of economic revival," it added, echoing analysts' concerns the projections for tax revenue and economic growth are too high, and the forecast fiscal deficit -- at an already alarming 5.3 per cent of GDP -- too low.

The Indian Express focused on a proposed Rs 150 billion in transfers to state governments linked to their carrying out crucial reforms.

"With his own options to carry on the reforms process severely limited, Finance Minister Yashwant Sinha decided to pass on the baton to state governments who have, so far, shown little sign of being pro-reform."

Other papers faulted the Budget primarily for being unimaginative.

"For an economy starved of fresh investments and jobs, Mr Yashwant Sinha could probably have done much more," the Business Line said.

The Financial Express began its Budget coverage with the line: "When in doubt, stick to the middle path."

"Caught between the compulsions of good economics and good politics," it added, "Mr Sinha has stayed clear of black and white policy choices."

Virtually all newspapers highlighted the fact that the average Joe, or Vijay, will be paying more tax during the year beginning April 1.

"All taxpayers, individuals and corporates, will be left with less to spend or save," said the Times of India. The Business Standard hailed the government's courage in winding back populist Budget items, but tempered that praise by saying such action did not go far enough.

"It's a brave Budget. Try and recall the last time a finance minister raised the prices of fertiliser, kerosene or cooking gas. And dropped the interest rates on small savings. And took away tax incentives on those savings. And taxed dividends, and imposed a tax surcharge."

"But while the finance minister has been willing to hurt, he has been afraid to wound. So the revenue raising has been done in half measures, leaving a large deficit because he has simultaneously tried to spend his way down the road to economic revival by jacking up plan outlays."

The Business Standard added: "To the extent that he (Sinha) has a fiscal plan, it is a structuralist one: the hope that his tax changes last year and the sectoral reforms this year will work together to bring about greater momentum."

But it said that sort of change would certainly take time, meaning no economic pickup will occur soon as a result of government action.

Reuters

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