ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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NEW DELHI-Pitfalls of Soft Budgetting

NEW DELHI Pitfalls of 'Soft' Budgetting BM THE more the Prime Minister tumbles in handling complex and difficult problems, the more aggressive and defiant his public postures and speeches seen to become. The latest of his performances in this context was the churlish attack in the Rajya Sabha on Opposition parties and leaders for what he alleged was their lack of appreciation of his government's budget for 1986-87, He charged all opposition parties and leaders with being pro-rich and indeed with having vested interest in perpetuating poverty. He and his Finance Minister had, on the other hand, taken up the heroic tasks of poverty alleviation and development by their hard decisions on resource mobilisation and allocation. If he is thus attempting, as the Finance Minister has also been doing after the presentation of the budget, to wipe out the stigma of the elitist orientation of the government's economic policies, this only shows his desperation and his inability to cope with the mounting problems and tensions in the economy, society and polity. The noteworthv feature of the budget for 1986-87 in any case is not a break with the pro-rich orientation or the start of an anti- poverty thrust. It is. in fact, partly a political-populist exercise to contain the popular backlash against the pre-budget hikes in administered prices and partly a desperate attempt to restore some degree of viability and stability to the budgetary balance which, according ro the Finance Minister's admission, had come under "severe strain" even as the so-called process of liberalising the economy was pursued recklessly in the last fifteen months. It is interesting to find, therefore, that big business circles and upper middle professionals, who had been so enthusiastic about the promises of rapid liberalisation and modernisation of the economy, arc beginning to express grave apprehensions that the budget may block the further strengthening and refinement of the liberalisation policies and indeed the entire process of liberalisation set in motion by the Rajiv Gandhi government's first budget last year may not only lose momentum but even come to a grinding halt. There are others who had misgivings about the handling of the liberalising trends in official policies and are suggesting that problems generated by too fast a pace of liberalisation are now being better appreciated among official policymakers and planners. This has helped, according to this view, the adoption of some corrective measures, though still half-hearted and halting, to strengthen more purposeful intervention by public authority in the economic development process. It can indeed be argued that the budget for 1986-87 is a step, but only a step, back from the precipice and may postpone the financial disaster to which the budget for 1985-86 was leading. The drift of budgetary policy, resulting in large losses of revenue and mounting expenditure on the demands of elitist consumption under the banner of liberalisation and pseudo-modernisation, would appear to have been halted at least for the time being.

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