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Mar 17, 2008
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Is the Budget relevant to infrastructure?
Yes and no. Allocations for new projects have diminished in relative importance, but policy pronouncements continue to have an impact. In the media-surcharged atmosphere surrounding the Budget, commentators and gurus are asked to comment on the impact of the budget on various sectors. Of these, infrastructure features as a key sector where reactions are sought. And this led me to ask a rather innocent question to Bidisha Ganguly — the economist who handles CII’s infrastructure secretariat, “How relevant is the Budget nowadays to the overall infrastructure sector?” Bidisha, in her usual diligent style, did a quick dive into figures and content.
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Mar 10, 2008
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Dawn of an era when sound economics is mortgaged to politics
THE impact of the 2008 Budget on the financial sector may, and in all likelihood will, extend well beyond the fiscal year to which the Budget relates. The centrepiece of the Budget proposals is the farm debt waiver. At Rs 60,000 crores, it represents around 3% of all bank loans outstanding. While previous governments have implemented debt waivers, nothing approaches the scale and magnitude of the current proposal. Commenting on the potential impact that this may have on the financial sector is somewhat vexatious—the reason is that notwithstanding the magnitude of the proposal, few details are actually available.
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Mar 03, 2008
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The making of the Budget
SHORTLY after UPA government managers took the decision to give a loan waiver to farmers, a group of finance ministry officials pored over the loan repayment record of borrowers—be it farmers, retail or corporate. The government was conscious that such a write-off would attract heavy flak, especially on the issue of moral hazard. Would it encourage farmers to default on future loans? These issues were debated. There was the Radhakrishna Committee report, of course, to bank on, but it stopped short of recommending a waiver. So a little analysis was in order, the government managers felt.
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