The detractors of the Finance Minister, Mr. P. Chidambaram, may have had a field day in holding back their applause for the 2007 Budget in spite of buoyant revenues, much above projections and expecta
March 6, 2007 (Press Release) --
New Delhi, 6th March 2007. The detractors of the Finance Minister, Mr. P. Chidambaram, may have had a field day in holding back their applause for the 2007 Budget in spite of buoyant revenues, much above projections and expectations, rising foreign exchange reserves, record foreign direct investment at $10 billion, high savings rate at 32 per cent of the gross domestic product or GDP, record foreign remittances at $23 billion and 9.2 per cent annual growth rate—the highest in independent India's history. How is it that even though the world is impressed by what is considered India's near economic miracle has not been adequately appreciated at home?
What has gone wrong? Is it pure politics of the right and left? It would seem so. Even the defenders of the Budget within the ruling party and its allies and outside supporters are somewhat muted in their words of praise. Why is this so? Is it because inflation is the real culprit and it is running away to new high levels? Although the rate of inflation is already 6.7 per cent of the GDP and is calculated on the basis of the wholesale price index, it does not tell the real story of where the shoe pinches at the retail level? Is it that the prices of onions are counted in the tears they bring out in the eyes of the housewife? Onions are just one factor, but they are the proverbial last straw on the camel's back. They are just an example of everything from rice, wheat, sugar, fruit and vegetables and the price effect in the household kitchen and the mark up in the eateries' menu card or at the dhaba or halwai prices.
Prices have been rising all the time, but in 2006 and the first ten odd weeks of 2007, they have gone up by 30 per cent to 100 per cent. There are a few things cheaper and that helps the statistician juggle the inflation rate and the wholesale price index.
It is true the Finance Minister has cut import duties across the board and cut excise on crude and vegetable oils and even biscuits, but the critics will invoke Marie Antoinette in saying that if you can't have bread or bake bread, take a biscuit or eat cake. He has made dog food cheaper and he accuses his critics of lacking a sense of humour. Is the Budget a joke? Is human food less important? But does Mr. Chidambaram have much control over the marketplace or market forces. He is trying to increase supplies by facilitating imports and give a push to farm production through a crash programme for the supply of quality seeds at affordable prices, but he can only go that far and no more. He has to keep his fingers crossed for the rest of the year.
The Minister may have cut tax on footwear in the hope that the shoe pinches less in the days to come, he may have cut the tax on steel, but raised the prices of iron ore to curb exports and cement.
New Delhi, 6th March 2007. The detractors of the Finance Minister, Mr. P. Chidambaram, may have had a field day in holding back their applause for the 2007 Budget in spite of buoyant revenues, much above projections and expectations, rising foreign exchange reserves, record foreign direct investment at $10 billion, high savings rate at 32 per cent of the gross domestic product or GDP, record foreign remittances at $23 billion and 9.2 per cent annual growth rate—the highest in independent India's history. How is it that even though the world is impressed by what is considered India's near economic miracle has not been adequately appreciated at home?
What has gone wrong? Is it pure politics of the right and left? It would seem so. Even the defenders of the Budget within the ruling party and its allies and outside supporters are somewhat muted in their words of praise. Why is this so? Is it because inflation is the real culprit and it is running away to new high levels? Although the rate of inflation is already 6.7 per cent of the GDP and is calculated on the basis of the wholesale price index, it does not tell the real story of where the shoe pinches at the retail level? Is it that the prices of onions are counted in the tears they bring out in the eyes of the housewife? Onions are just one factor, but they are the proverbial last straw on the camel's back. They are just an example of everything from rice, wheat, sugar, fruit and vegetables and the price effect in the household kitchen and the mark up in the eateries' menu card or at the dhaba or halwai prices.
Prices have been rising all the time, but in 2006 and the first ten odd weeks of 2007, they have gone up by 30 per cent to 100 per cent. There are a few things cheaper and that helps the statistician juggle the inflation rate and the wholesale price index.
It is true the Finance Minister has cut import duties across the board and cut excise on crude and vegetable oils and even biscuits, but the critics will invoke Marie Antoinette in saying that if you can't have bread or bake bread, take a biscuit or eat cake. He has made dog food cheaper and he accuses his critics of lacking a sense of humour. Is the Budget a joke? Is human food less important? But does Mr. Chidambaram have much control over the marketplace or market forces. He is trying to increase supplies by facilitating imports and give a push to farm production through a crash programme for the supply of quality seeds at affordable prices, but he can only go that far and no more. He has to keep his fingers crossed for the rest of the year.
The Minister may have cut tax on footwear in the hope that the shoe pinches less in the days to come, he may have cut the tax on steel, but raised the prices of iron ore to curb exports and cement.
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