India's budget not shocking; not rocking either

THE VERDICT is out. Doubting Thomases notwithstanding, finance minister P Chidambaram’s all-things to-all-people Budget has found favour with the aam aadmi, reports Shailesh Dobhal in New Delhi. Though not feeling exactly ecstatic, having been let down on personal income tax and spiraling prices, 86% of consumers polled by market research agency TNS India for ET’s ‘Post-Budget Survey — Mood of The Nation’, have rated the Budget as positive. The survey was carried out across metros, Hyderabad and Bangalore. In comparison, Mr Chidambaram’s last Budget was hailed as ‘pure delight’ by 91% of consumers in the ET survey. Just 12% of consumers rated the Budget as bad, with the majority of 63% rating it as average, and 23% terming it as good. And what’s best for Mr Chidambaram’s big-picture Budget — “distributing gains of growth to a large number of people” — is that almost two-thirds, or 62%, say it is a growth-oriented, pro-investment Budget. A majority, 54%, say it will help them to save/invest more — while it’s split right down the middle, almost 50:50 — when it comes to the Budget facilitating more earnings. It’s a different story though for PC’s Budget 2007-08, if you consider what 6,200-odd netizens (the khaas aadmi if it were) had to say on www.etbudget.com. On a 1 to 10 scale (1 being lowest), over 70% rated the Budget below average (5 or under). Over three-fourths rated it negative on growth, impact on prices, stock markets and personal incomes. It’s interesting to note that the consumers have not been overly influenced by opinions of motley crowd — television-friendly analysts, businessmen and talking heads — who consigned the Budget to the dustbin even before the FM was through with his 103-minute speech in Parliament. IS IT that lay consumers have been charitable with the FM or do they know better, even more than the stock markets, which tanked after the Budget presentation on Wednesday, though largely on weak global cues, only to spring back on Thursday? Why, almost half—48% consumers—voted the Budget as good for the stock markets during a day when bears held sway across bourses, globally. After all, on pure facts, this Budget has not really handed out much to consumers, either in terms of specific measures in bringing prices down or making their incomes count for more through lower personal income tax. “In a year where tax collections have been buoyant, there was not even an iota of meaningful relief to individual tax payers,” says Technopak chairman Arvind Singhal. Though he is right here, the prognosis on why consumers have reacted positively needs to be read differently. The simple fact is that FM can be blamed for everything—from tinkering with tax rates to being stingy with honest tax payers even in times of plenty—but doing anything that may have directly hurt consumer sentiment. Absence of any bad measure in itself became good news for consumers in the backdrop of palpable economic momentum. “Collective, and often unconditional optimism, has become the hallmark of the consuming classes in India, come what may,” says Partha Sinha, regional strategist (South Asia), Publics. “Though this Budget will have no big direct impact measures for consumers, it has long-term vision in terms of focus on education and agriculture, which will have a bearing on consumer markets,” says Deepak Kapoor, managing partner, PwC India.

Courtesy: EconomicTimes
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