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The Rediff Budget Jury/Dr E A S Sarma

'The most important advantage that has accrued to the common man is the low rate of inflation'

BUDGET 2000

Politics and economics are closely interlinked. However, as far as the Budget is concerned, by and large, it is based on economic considerations. Of course, the Budget speech is an expression of the policy of the government and any government policy has to address itself to important political issues.

In our view, the Budget is quite balanced. The Budget speech does try to cover all important concerns of the government. If some issues are not explicity covered, I can assure you, it is not deliberate.

I share people's concern about the need to cut government expnditure. The Budget speech makes a mention of the economic measures being initiated within the government machinery. The government machinery will have to be right-sized. The government has constituted an Expenditure Commission to come up with the manner in which the government departments can be downsized and streamlined.

As far as the common man is concernced, the Budget speech refers to the subsidies being continued at a certain level for households below the poverty line. The most important advantage that has accrued to the common man is the low rate of inflation that the governement has enabled to achieve and maintain for several months.

The current year has been a difficult one with extra government expenditure on defence, Orissa cyclone and other unanticipated items. This has neccessitated some measures of taxation. However, every effort was made to minimise the impact on the lower income groups of the salaried class and the others.

Even in the last Budget speech, the FM had announced a number of measures that gave an impetus to the construction industry. The current Budget should see these sectors registering further growth.

Last year, in his Budget speech, the FM did mention the intention of the government to downsize government departments to set an example. A senior level post in the finance ministry and a few other similar posts in other departments were also abolished. However, this is a process that needs to be given the highest importance and am sure the Expenditure Commission now constituted, will come up with major recommendation on this.

I do not agree with the view that the regulatory structure in telecommunications in India has had a setback. People are aware that the government has taken urgent steps to examine the legislation on telecom regulation and issued an ordinance to strengthen the regulatory authority.

With such independent regulatory authority and a very large potential growth in the market, I have no doubt that the telecom industry in India is going to register a very significant growth in the coming years.

There are no two opinions on the urgent need to eliminate corruption in our society. This will go a long way in strengthening not only the economy but also our social structure.

Dr E A S Sarma is secretary, economic affairs, Ministry of Finance, Government of India

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