News

Yashwant Sinha has tough task ahead
Whether Finance Minister Yashwant Sinha likes it or not, the Budget that he will present on Monday is bound to be compared to the ones presented by his predecessors Manmohan Singh, who set off the reforms process and P Chidambaram whose came out with the famous dream budget. All eyes are on Sinha, awaiting the direction he intends taking. Senior journalist Kewal Verma said all the three finance ministers have been the fountainheads of of new direction. Though the private sector was opened but it was riddled with mistakes. He said prices rose too quickly and the public sector was withdrawn from the infrastructure sector too fast, while the private sector was not ready to take over. Verma said Singh was unsympathetic to the poorer sections, while Chidambaram's pace of reforms was unmanageable. Verma said despite innovative schemes like VDIS, Chidambaram failed to leave a lasting impact. But that was primarily due to the loosely woven coalition to which he belonged. He said Sinha's challenge was to increase income and control expenditure. He said while the sanctions had made Sinha's task tricky, if defence expenditure was hiked striking a balance with key areas of economy would make it worse. While consumer goods companies have flooded the market, there are no buyers. Unsold stocks of goods, lying with manufacturers and traders are higher by 14 per cent. In case of steel these are as high as 50 per cent. While the infrastructure sector tugs for attention, the government has committed over Rs 20,000 crore on the raise in salaries. If the minister hikes direct taxes to mop up funds, it is likely to be objected. If he raises excise, the depressed industry would be hit hard and customs will affect international trade. If the government resorts to printing currency, it will have an inflationary effect. Meanwhile, Sinha treads on thin ice as he prepares the budget which will be presented at 5 pm (IST) on Monday. (Business Aaj Tak)