Softly, softly on Jaitley's Budget

BY Darius Nakhoonwala| IN Media Practice | 12/07/2014

You don’t say!
Darius Nakhoonwala

Seldom have I enjoyed watching the faces of India’s corporate bigwigs more than after Arun Jaitley’s first – and hopefully only – Budget. Poor fellows, having funded Damodarbhai’s election campaign, they expected a lot of goodies. It was not to be. By the end of the day, although they were all making valiant efforts to put on a brave face and find some redeeming features, their gloomy demeanour said it all. 

My own reaction was that Messrs Modi and Jaitley had fluffed it by not sounding the high notes, so imagine my surprise the next morning when the editorials of all the major business and general newspapers tried their best to put a gloss on what is conceded by most people to have been a pedestrian Budget that was a botched opportunity and looked like a continuation of a UPA document.

The Business Standard, arguably the most influential business newspaper, not content with its headline “Budget brings cheer”, strangely decided to start with the fiscal numbers. It sounded sceptical about the projections but let the Minister off gently with “the disinvestment target in particular will be a challenge — even if the buoyancy on the stock market is a helpful development.”

Indeed, its tone throughout was soft and compassionate. “There is optimism on display in the tax revenue assumptions as well... Mr Jaitley has constructed his Budget on the assumption that the promise of “acche din” (good days) are already here... Mr Jaitley’s Budget is designed to win plaudits all round.”  It then gave several examples of the things it approved of.  The edit was full of words like rational, sensible, logical and so on. Not once it did say that the Budget had failed to, as expected, change the mood of the country.

Mint was similarly kind. In a fairly short edit – the others all held forth at length -- it started off saying that “Arun Jaitley inherited an economic mess created by several years of mismanagement. His first Budget...should be seen as an initial, tentative attempt to nurse the economy back to health." No mention of the sheer awfulness of the speech itself and its lack of vision. Then Mint went on to hold out the hope that, as in 1991 and 1992 or 1996 and 1997, when great things got done in the second Budget, "the lack of an overarching economic strategy in the first Jaitley budget should be seen in this context".

The Hindu Business Line also took the same view:  “This is the first Budget of a Government that is barely 45 days old. One must, therefore, take into account the time constraints in framing it before making extreme judgments. This is a Budget that needs to be allowed time to work and must be followed by other, more radical measures, on the same directional plane, once the economy is showing signs of getting back on its feet”. 

The Financial Express sang a similar tune. “Though markets dismissed it as a non-event, after a sharp 800-odd point movement during the day thanks to a seeming lack of big ideas and impossible tax targets, the Budget’s biggest achievement is that it looks doable.” Really?

The paper blamed the public for not greeting the Budget with a loud roar of approval. “It speaks volumes for how far India has travelled that liberalising rules for FDI in both insurance and defence manufacturing, normally top on the list of most Budget lists, have been dismissed as non-events, as has the FM sticking to the aggressive deficit target.”

The Economic Times did not write an edit at all. That was comment enough, perhaps.

As might be expected, the Pioneer clapped the loudest. “Arun Jaitley has presented a holistic, development-oriented, and not a 'pro-industry' or 'anti-aam aadmi, Budget. In the limited scope that he had, given the economic mess he inherited, he has managed to string together a series of measures that has the potential to unleash what commentators generally refer to as the “animal spirits” of the Indian economy. If he is able to successfully implement a considerable part of his proposals... the turnaround ... can become a reality and the next Budget will be able build upon those strengths and offer a truly revolutionary change. For now, the markets have reacted cautiously to the proposals, as have industry and the people.” Ha ha ha, yes, they are not cheerleaders for the BJP.

The Indian Express did point to all the problems in the Budget but almost sotto voce. “It did not take any bold measures... In a nutshell, Jaitley appeared to take the UPA’s cues... What Jaitley did quite adeptly is pluck the low hanging fruit, which the UPA government failed to all through its second term...however, the NDA government could have taken the tough decisions and administered the “bitter medicine” for a larger good that Modi has spoken of so eloquently. But Jaitley chose not to overwhelm the macro pundits... The finance minister took only guarded and time-tested steps to spur growth...” and on and on like this till its innate honesty forced it to say that “Jaitley has kept quiet on tricky subjects. Perhaps the silence was deliberate. The debut Budget could be seen as the first of a five-part economic statement the NDA government has in mind.” Perhaps, yes; perhaps no.

The Hindu, too, was uncharacteristically sympathetic. “Arun Jaitley has done well to emphasise that the measures announced in the Budget are only “the beginning of a journey towards a sustained growth of 7-8 per cent or above within the next 3-4 years along with macroeconomic stabilisation that includes lower levels of inflation, lesser fiscal deficit and a manageable current account deficit.”

Only the Telegraph had the cheek to point out that “...Mr Jaitley had to show that the slogan of “acche din” was not an empty electoral promise. A large majority expected Mr Jaitley to come up with a big bang budget which would provide a big stimulus to the economy. The actual budget will come as a disappointment to this group because it is devoid of any bold or big ideas.”

Then it said oops! and added “This does not necessarily mean that it is a bad budget. Mr Jaitley has managed to incorporate several small positives without rocking any major boat.”

But in the end it was the only paper to point to all the negatives in the Budget. “Perhaps the biggest negative is the absence of detail in many items or complete omission” which it then proceeded to list.  

The Times of India also kept its comments low key. The Budget, it said, “was characterized by a mix of gradualism in reforms, an attempt to boost the economy by putting more money in the hands of taxpayers and providing fiscal incentives for manufacturing, and a message that stability will be at the heart of economic policy. His long speech, reminiscent of the rambling approach of his predecessors, avoided mention of reforms in areas such as disinvestment...(the) Economic Survey had suggested returning to a high growth trajectory will take effort. The kind of effort in Jaitley’s first budget doesn’t go far enough. The time for incrementalism is gone. If he is not aggressive in pursuing reforms, the Indian economy will remain vulnerable to the slightest of shocks.”

The Hindustan Times wrote a lacklustre but laudatory edit. “Jaitley has struck the right notes on the broader issue of economic reforms in India. For a capital-scarce economy, allowing overseas investors to deploy funds in high-growth sectors is, perhaps, the first step in seeking to spin jobs and multiply income. In his Budget, the minister has clearly stated the NDA government’s position on key issues.”