Business Today

Budget 2012-13: Will Pranab keep 2014 in mind?

The finance minister is not expected to pull any rabbit out of the hat, but instead press the gas on another large social-sector scheme - 'food security' targeted at poor people.

twitter-logoAnand Adhikari | March 12, 2012 | Updated 16:48 IST

Anand Adhikari
Business cycles and economic cycles are a reality, but a man on the street or in a corner room never knows when these cycles are set in motion. By the time he gets a learns of it, there is either elation or a pall of gloom.

Like unpredictable business cycles, election cycles, too, arrive much before the appointed date. It is more so in the world's largest functional democracy, like India, where politics rules economics.

Last week's unexpected setback in the state elections to the grand old Congress party that leads the UPA government at the Centre has actually set the stage for a long election cycle.

EDITOR'S VERDICT:What the polls results mean for the economy?

And the biggest tool in the government's hand is the Union Budget 2012-13, to be announced on March 16.

The disappointing results in the three big states - Uttar Pradesh, Punjab  and Uttrakhand - is a big trigger in the sense that the ruling party was hoping to ride back on the anti-incumbency factor.

These three states alone contribute close to 100 MPs to Parliament, which is almost 20 per cent of the house strength at 552 members. And not to forget the eight prime ministers from Jawaharlal Nehru to Atal Bihari Vajpayee coming from the country's most populous state.

FULL COVERAGE:Budget 2012-13: Will Pranab live up to expectations?

Experts say the Union Budget 2012-13 is now expected to make amends by getting into the inclusive growth agenda more aggressively.

The state elections are also due in other crucial states like Gujarat towards the end of this year, where there is little chance because of chief minister Narendra Modi's popularity. Maharashtra, too, doesn't offer any solace as Shiv Sena-BJP overshadowed other parties in the recent municipal elections.

BUDGET 2012:Fiscal discipline needed, Mr. Finance Minister

The ruling UPA alliance has only two Budgets left to set the house in order. The next Budget is due in February 2013, which would be the last full fledged Budget as general election are due in May 2014, when only a vote on account would be allowed for clearing the expenses for few months till the election results.

In the last stint of the UPA government (2005-2009), the Congress conceived  and launched the flagship Mahatma Gandhi National Rural Employment Guarantee scheme (MGNREGA) with an outlay of $2.5 billion in the very first year, 2006-07.

MUST SEE:10 Budgets that changed India

In May 2009 general election, this social security scheme paid rich dividends to Congress. The Congress party surprised everyone by coming back to power with single largest 205 seats in 2009 elections. That was a huge victory despite the anti-incumbency factor and runaway inflation.

Finance Minister Pranab Mukerjee is not expected to pull any rabbit out of the hat, he will instead press the gas on another large social sector scheme, 'food security' targeted at poor people.

The cabinet has already cleared the Food Security Bill in December 2011 and now Parliament's approval remains.

MUST SEE:Finance Ministers and their Budgets

Experts say Mukherjee will kick off the scheme with an allocation of Rs 5,000 crore to start with in 2012-13. And the next Budget could see the grandiose plan for food security.

This is one subsidy that no one would object to (though they may object to the manner in which it would be delivered) in a country where nearly 40 per cent of the people live below the poverty line.

And they all are committed voters!

  • Print
A    A   A