Sonia Gandhi Budget !

There may have been a lot of people surprised or shocked with the projected 6.8% Fiscal Deficit in the Budget Year 09-10. I for one, am not. The budget reflects exactly, the mandate received by the Congress in the Lok Sabha Elections 2009. The mandate is to talk not of economic liberalization, disinvestment of PSUs, etc. The mandate is to follow the leftist stance that the Nehru-Gandhi family always represented. To this extent, this is not a Manmohan Singh budget. This is a Sonia Gandhi budget.

Social Sector spending obviously was expected to escalate. We are back to pre-1991 era. The fiscal deficit is not going to be a concern for the government. The government will continue to be the biggest borrower of money. All that one can hope is that the money laid out for the intended improvement in the standard of living of rural India does not go down the drain, as it has in the past.

Meanwhile, the biggest casualty is the Fiscal Responsibility and Budget Management Act (FRBM). The goverrnment is going to just pay lip service to FRBM and continue with its extravaganza. Expect the Bond Yields to shoot up. Those who are long on dollars - continue to do so. The rupee should be devaluing even further.