Wait for the time when someone will sit down and present the history of these four years. That will bring out the fundamental changes I have made. Second generation reforms started during my regime. And those are tougher than first generation reforms.
Finance Minister Yashwant Sinha to TheNewspaperToday after presenting the budget

We need to just relax and say to hell with the budget.
TVS Motor's CEO Venu Srinivasan on the relevance of the budgetary exercise

Surely, Yashwant Sinha knows what it'll take to get the economy to grow by 7 per cent. Maybe, 9 per cent.

Bollywood icon Aamir Khan probably does.

As does, at a stretch, a high-school student with some exposure to economics.

And the authors of this article would like to think they do too.

It is, r-e-a-l-l-y, that obvious.

First off, the fiscal deficit will have to be contained. Budget 2002 pegs the fiscal deficit at Rs 1,35,524 crore or 5.3 per cent of the GDP. If you think that's a shocking number, wait till you find out how much the government spends on interest: Rs 1,17,390 crore. In more affordable terms, the government spends 25 paise out of every rupee it earns on interest payments. And as the Expenditure Budget for the year notes sotto voce: ''The increase in the budget estimates, 2002-03, is mainly due to larger requirement for interest on internal debt.'' Even a marginal improvement in the deficit could free up resources for developmental and infrastructural initiatives and, paradoxical as it may sound, help channel government spending into productive areas.

Then, the government will have to get serious about second generation reforms in three critical areas: agriculture, power, and labour. Unfortunately for Sinha, much of what needs to be done in these sectors falls outside the purview of the finance ministry. Worse, power sector reforms won't happen without the co-operation of the states.

And finally, there's the issue of tax reforms. Individual tax rates in India may not be as high as they are in Finland (60 per cent, but have you seen the quality of the social infrastructure there?) but a reduction in the peak tax rate, many pundits argued before February 28, would increase compliance. That wasn't to be. Nor did the finance minister speak of moving to a tax regime where there is no difference between the highest individual tax rate, and the corporate tax rate-currently, there's a 5 per cent differential, one that can't really be explained by anything other than the most recidivist philosophy about companies, and profits, being bad.

So, if everyone knows what needs to be done, and the fm can't do them, what does the budget achieve? And, what should it? ''The budget should be only about fiscal issues,'' says Cyrus J. Guzder, Chairman and Managing Director, Air Freight Ltd. Adds Ford India CEO David Friedman: ''In the US, no one knows what the budget is; and the budget should become less important in India because it has moved away from the socialist mode.''

2-28 Blues

No one in their right mind will regret the growing irrelevance of the budget as a policy-making exercise. C. Subramaniam, the fm between 1975 and 1977, was the man who hijacked what had until then been a fairly straightforward statement of the government's finances and converted it into a vehicle for policy announcements. Over time, the men who came after him focused more on the latter than the former. To little avail, though: over the past decade, politics invariably got in the way of economic policy-making, and few budgets ended up delivering what their makers promised. For instance, Manmohan Singh promised to review the FERA Act of 1973 in his 1994-95 Budget and P. Chidambaram, to replace it with the Foreign Exchange Management Act in 1997-98. Finally, the FEMA came into being in 2001 (See Ten Budgets And Zero Impact).

More evidence comes from all Sinha said in Budget 2001-02. A vision statement that some industry-representatives hailed as a '10/10' budget failed to spur economic growth. Worse, it actually fell far short of its targeted fiscal deficit of 4.7 per cent of GDP by a full percentage point. One only need as far as one of the lesser documents presented by Yashwant Sinha along with this year's budget to obtain more proof. Titled 'Implementation of Budget Announcements 2001-02', it lists the 103 promises made by him in last year's speech, and points out that the status of at least half of the lot is ''Action Completed''. Only, the most significant of these, happened in a rush, on February 5. ''For 11 months nothing happened, and when the announcements came, everyone cheered,'' laughs Gautam Thapar, Vice Chairman and Managing Director, Ballarpur Industries.

Should the budget at all be a vehicle to announce the government's economic policies? Not really, feels India Inc.. ''The government will have to take decisions throughout the year,'' says Manoj Chugh, the head of Cisco's Indian operations, adding, tongue firmly in cheek that the hype associated with the Union Budget may have something to do with India being a ''country of festivals''. Max India's chairman Analjit Singh agrees: ''The budget will always bring important fiscal announcements, but other issues are becoming, and should become more ongoing.''

Sinha's Defence

There is, surprisingly, an emerging contrarian view of Sinha's middle-of-the-road budget-KSA Technopak CEO Arvind Singhal terms it ''insipid''. This portrays the fm not as a tired man who has run out of ideas to stimulate the economy, but a master-strategist trying to co-opt the private sector into mouthing lines from his growth script. And the basis of this argument has little to do with the Rs 12,000 crore that Sinha says will accrue to the government from the disinvestment process in 2002-03. ''This budget is a good one for infrastructure,'' says Vinayak Chatterjee, Chairman, Feedback Ventures. ''And the move to give reforms-linked assistance to the states is a good one.''

There's more on the positive side: the deregulation of the dairy sector; the phasing out of export controls and the introduction of futures and forward trading on agricultural products; and the progress on the capital account convertibility front.

Bobby Parikh, Country Managing Partner, Andersen, sums this up best: ''The budget may not seem to have done enough to spur consumption or growth, but it does try to set right several imbalances in the economy. Now it is up to companies to make the most of opportunities.'' Put simply, Sinha may be asking India Inc. to think beyond the budget. We couldn't find a better argument on the irrelevance of the budget.

-additional reporting by Seema Shukla, Swati Prasad, and T.R. Vivek