One of the best Interim Budgets: BB Bhattacharya

On the 16th of February 2009, acting Finance Minister Pranab Mukherjee presented the Interim Budget for 2009-10 in the Lok Sabha. Markets and analysts have reacted negatively to the absence of any major policy initiative in the budget. However, noted economist and Vice-Chancellor of Jawaharlal Nehru University Professor B B Bhattacharya, in an exclusive interview with Zeenews.com’s Sushmita Dutta, said "It was probably one of the best Interim budgets”.Excerpts from the interview:

Sushmita: If you were to rate the budget on a scale of 1 to 10, how much would you give it? Prof. Bhattacharya: As an Interim Budget, it is very good, probably one of the best Interim Budgets. Sushmita: How do you react to the justification of ‘constitutional propriety’ given by Pranab Mukherjee for not taking more measures? Prof. Bhattacharya: Since this is only an Interim Budget, the Finance Minister has not proposed any major new policy. In this respect he is faithful to the Constitution. Sushmita: Could you tell us of a few measures that Pranab could have taken to help the economy, without going outside the bounds of constitutional propriety? Prof. Bhattacharya: Since many measures such as 4% cut in CENVAT, big increase in plan outlay etc., were already taken before the budget, there was no need for any other major measures at this stage. Sushmita: What is your take on the broader question of economic liberalization and opening up the markets, when it was an excess of this that has caused the economic downturn in the US? Prof. Bhattacharya: Economic liberalization performs best when there is transparent and efficient regulation of markets. Sushmita: What do you think would be the impact of opening up futures trading in commodities? Prof. Bhattacharya: This may have to wait till situation normalises. Sushmita: Some of UPA’s budgets, like one in 2008, have been called populist. How do you react to this charge? Prof. Bhattacharya: This budget is not a populist budget. Sushmita: In a broader sense, whenever governments have tried to dole out sops for the common man, they have been accused of being populist. They have also been warned of fiscal irresponsibility. Today governments around the world are giving out huge bailouts to rich corporations and it is seen as necessary. Do you think economic policies have become biased in favour of an abstract market vis a vis the common man? Prof. Bhattacharya: Bailouts are justified when they protect employment and prevent financial collapse. There is no justification of populist bailouts. Sushmita: Do you think the budget presented by Pranab Mukherjee can work as a lifesaver in the present scenario of recession? Prof. Bhattacharya: No. This is only an Interim Budget. Real policy changes should be taken through a regular budget. Sushmita: Is the common man benefited or can expect any supportive hand to their pocket? Prof. Bhattacharya: Government employees have already benefitted from pay hike. Farmers and rural labourers have benefitted from debt waiver and NREGA. Sushmita: Is there any shortcoming in the Budget? Prof. Bhattacharya: The only measure it could have initiated is a scheme similar to NREGA for urban workers.