But the budget is well focussed and has been thought through carefully. Hence, it has achieved a fair balance between different proposals and meets the economic criteria expected of it, satisfactorily. Even though Mr Sinha has taken away as much as Rs 9,300 crores in the form of new taxes, he has carefully cushioned the shock by creating enough avenues for new income and assets to be put into the pockets of corporates and individuals in the future. The success of the gold bond scheme will, however, fall short of expectation because no tax amnesty has been granted and gold jewellery cannot be used. These are major disincentives, which may have to reviewed.
Past experiences indicate that there is no guarantee of either.
As for reforms, although a lot more could have been done, the budget has delivered more than was expected from it. By simplifying the excise and customs duty rate structures and foreign investment rules, Mr Sinha has done precisely this. It is difficult to predict whether these changes will lead to a revival of industry because, as Mr P Chidambaram discovered when he sharply reduced direct taxes, this does not depend on just one or two factors. But as opposed to 1998, this budget will not be an obstacle in the path to revival. The benefits would be in the form of rise in sales of cement and steel and higher export earnings from the IT industries.