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Budget likely to be passed despite parliamentary crisis

There should be enough time for an arms bribery scandal rocking the government to subside to allow parliamentary passage of the national budget presented last month, analysts said on Friday.

Under the country's constitution, the business-friendly Budget put forward on February 28, must be passed within 75 days. This means the Budget needs to win assent before May 15.

"There's enough time for the Budget proposals to be passed," said D K Srivastava, economist with the New Delhi-based National Institute of Public Finance and Policy.

"If nothing more happens, I feel the crisis would blow over by the time the bill is put up for passage," he said.

Until Thursday, the government commanded just over 300 votes in the 545-seat lower house of parliament.

But with the exit from the ruling coalition of the regional Trinamool Congress, it needs the backing of the Telugu Desam Party, which supports it from outside with 29 lawmakers.

Passage of the finance bill is traditionally the last item to be taken up in the Budget session, which runs until May 11.

The 2001/02 (April-March) Budget included a number of measures aimed at ushering in India's so-called second generation of economic reforms.

Finance Minister Yashwant Sinha streamlined the tax structure, cut interest rates for small savings and vowed to press with economic reforms such as the sale of state-run firms.

Analysts said the casualty of the political crisis could be the political will of the government to press ahead with reform measures promised in the Budget in areas such as privatisation and labour.

"Reforms would take a back-seat because this will not be a priority area. With the polarisation of opposition parties, the government would be cautious to move ahead with privatisation and the labour reforms," said Srivastava.

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