India's Finance Minister Jaswant Singh yesterday lived up to most predictions by unveiling a package of populist measures designed to please middle-class voters in his maiden budget.
'Selectively good for some sections of society and electorally very good indeed,' said economist Bibek Debroy in a reference to the fact that several state elections are happening this year and a general election is scheduled next year.
The ruling Bharatiya Janata Party had been dismayed at the middle class's unhappiness over the last budget, so Mr Singh had been expected to announce voter-friendly measures aimed at giving people more money to play with.
The 'feel-good' budget (which Mr Singh wrote himself in a break with tradition), gives the middle class tax breaks for their children's school fees, makes private medical treatment (only the poor go to government hospitals) cheaper by extending tax benefits to private hospitals, and reduces their income tax burden by abolishing a 5 per cent surcharge on personal income.
To drive consumer demand, computers, cars, CDs and audio cassettes, pressure cookers and clothes will be cheaper thanks to lower Customs duties. In fact, Mr Singh has cut a whole range of Customs duties. He promised continued liberalisation of the economy through privatisation and deregulation of state-protected sectors.
Director-general of the Confederation of Indian Industry, Tarun Das, called the budget 'great'. 'It is a budget for growth. It has outlined new strategies for growth with a reduction of excise duties,' he said.
The poor also get some benefits, perhaps the biggest being a drive to provide them with health care.
