Archive for February, 2011


The takeaway: Ultimately, this was a budget speech with too few details to be convincing. On the one hand, fiscal consolidation (narrowing of the deficit) was impressive and Mr. Mukherjee promised more cleaning up of the government’s books. But he didn’t address some huge areas of coming spending, like the cost of a food security bill, which could be fiscally back-breaking if India opts to cover 75% of the population with a subsidy guarantee, as some are proposing. Meanwhile, the announcement of a higher cap for foreign investment in infrastructure bonds was heartening for investors abroad, but the big reform people were looking for – liberalization in retail – didn’t get any mention. If the minister doesn’t called for it aggressively now, it’s hard to see the government pushing through such a controversial reform this year, but we’re open to waiting and watching. The most promising sign in the budget was that the government is open to innovation in the delivery of public services, such as Mr. Mukherjee’s note that subsidies may be given out in cash payments (for some commodities) rather than the creaky public distribution system. Overall, Mr. Mukherjee gets a grade of B

Live-Blog: Finance Minister’s Budget Speech – India Real Time – WSJ


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