The editorial “Last and final call” (February 8) makes some strong economic and fiscal suggestions to the finance minister for the upcoming Budget. The finance minister also faces the challenge of balancing growth and inflation. In India, budgeting for this involves an inseparable mixture of economic, political and ethical variables. Thus, what is economically obvious (like reducing unproductive subsidies or deregulating diesel prices) is politically unthinkable. The not-so-congenial relationship between the states and the Centre impedes sensible measures (like the goods and services tax) owing to political compulsions on both sides.
On the ethical front, rampant corruption affects growth (through malutilisation of funds) and inflation (through, say, a notorious public distribution system). The Budget should tackle this malaise by providing incentives for honest income and exemplary penalties for fiscal dishonesty. A Budget in turbulent external climate and complex domestic expectations of growth and low inflation will be the acid test of the finance minister’s creativity and courage.
Y G Chouksey, Pune
