It's About Politics
The limits on Finance Minister Yashwant Sinha's budget this year are political. He has the prescription to put the economy on a high growth track, but hampered by vested interests, vote-bank politics and stubborn opposition parties, he is unlikely to deliver.

The Rot in Farming
Falling prices, stagnating production and diminishing returns are brewing an unparalleled crisis in farmlands across India. Ironically, the alarming situation has arisen despite an unprecedented 12 consecutive normal monsoons.

Creeping Paralysis
Doubts over Keshubhai Patel's fitness to rule are growing after his government failed to provide basic relief like tents to those affected by the earthquake. Despite having speedily restored electricity and water, which earned praise from some international agencies, criticism over Patel's poor marshalling of resources continues.

Artless Artistry
The festival tried to exhibit the widest selection rather than the best, making it a disappointing show.

Stillness of Change
The legendary bamboo curtain is lifting to reveal that Myanmar isn't quite the "fascist Disneyland" it is made out to be. The winds of change have brought back English as the medium of instruction and Aung San Suu Kyi is talking to the military. After prolonged isolation, Yangon wants to face the world, but on its own terms.

Making It Happen
John Buchanan gives an exclusive insight into what it takes to coach the world's most successful team. He also enumerates what
he feels will be the Indian strengths that the Aussies
will have to watch out for.

Strategic Partners
As emphasis shifts from relief to rehabilitation, Care Today is selecting regions to focus on and NGOs to help it channelise aid. The involvement of victims is integral to the plan so that their dignity remains intact.

COVER STORY: BUDGET 2001

It's Politics Stupid!

By Rohit Saran with Lakshmi Iyer and Farzand Ahmed

"As we move together with discipline, the future is ours."
-Yashwant Sinha, June 1, 1998

"These achievements will transform India into a genuine superpower."
-Yashwant Sinha, Feb 27, 1999

"The world's eyes are upon us, and we will deliver."
-Yashwant Sinha, Feb 29, 2000

One thought that consistently runs through the last words of Finance Minister Yashwant Sinha's three budget speeches is hope. Hope that he would be able to achieve what he proposes in his budgets. Hope that he would have the freedom to push his tough measures despite populist pressures. Hope that good economics would eventually become good politics.

The reality, however, seldom matches his hopes. The perennial failures in privatisation, the swelling subsidies, the fiascos of government downsizing and the stonewalling of taxes on agriculture and exports-on every major area of budget making the gap between hope and reality is large and growing. The gap is, almost entirely, politics.

For good or for bad, politics has always influenced budgets in India. But there are reasons why its impact seems more pronounced today than ever in the past. The virtual convergence of economic ideologies in the 1990s has left little scope to oppose budget proposals under the garb of ideology. The opposition, or support, is now almost entirely driven by mundane political compulsions. The lack of know-how on reforms-an excuse for the slow speed of reforms in the past-is not valid anymore too. Ten years of collective wisdom has ensured that no finance minister is lacking in advice on the what and how of reforms.

In a way, the dominance of the economic agenda in the 1990s and consequent rise in the finance minister's stature in the Union Cabinet has imparted more autonomy to budget making than was possible previously. But the advent of coalition governments at the Centre has neutralised much of that autonomy. P. Chidambaram, who was the finance minister of the first truly coalition government at the Centre, admits, "The autonomy of the finance minister did come under scrutiny in the coalition era. But there are ways one can defer to some coalition demands without upsetting the budget."

For instance, Tamil Nadu Chief Minister M. Karunanidhi was insistent that the upcoming Tuticorin port in the state had to find a mention in the 1997-98 budget speech. What did Chidambaram do? He mentioned both Tuticorin and Kochi as the two container ports being developed on the east and west coast of peninsular India. But not all allies may be as accommodative. Despite a clear indication from Sinha and Prime Minister Atal Bihari Vajpayee of a hike in passenger fares in this year's railway budget, Railway Minister and Trinamool Congress President Mamata Banerjee has ruled out the possibility. At least till the assembly elections in the five states get over in April. She is not the only one with an eye on elections. "We expect most harsh decisions to come in the form of executive orders rather than as budget proposals," says a senior Telugu Desam Party (TDP) functionary.

The pressure on budgets doesn't come from parties alone. Individual MPs also block proposals, irrespective of their party positions. Between 1992 and 1995 custom duties on optical lenses could not be reduced because an MP from West Bengal wanted protection for a domestic manufacturer based near Kolkata. It is almost customary for MPs from the Nilgiri region of Tamil Nadu to protest lowering of duties on photo films because the public sector Hindustan Photo Films is located in the region. In fact, on issues like disinvestment, reservation for small-scale industry (SSI) and tax cuts, constituency considerations of individual MPs could vary significantly from their party's political stance.

Then there are issues on which the BJP is constrained by its own fraternity. SSI reservation is one example. A traditional support base of the BJP and the Swadeshi Jagran Manch, small industries' survival will be difficult once the licensing of imports ends on April 1 this year, as is mandated under the WTO. The option is to remove investment ceiling on SSIs so that they can grow and compete with imports. But exercising that option isn't politically feasible as yet.

That is where the support of the prime minister becomes crucial. Especially in a coalition government, it is the prime minister who filters the competing demands on the budget. That is why Budget 2001 will be as much a reflection of Sinha's strength in wading through the economic compulsions of the day as of Vajpayee's acumen in balancing the political pressures from within and outside his Government. INDIA TODAY outlines pressure points that underlie this year's budget and how they may reduce it to an exercise in futility.

MetroScape
Charitable Mood
In the backdrop of murky allegations about underworld connections, philanthropy by the Bollywood badshahs comes a little more easily.
more...

Looking Glass

Delhi: Lifestyle Store

Delhi: Film Festival

Mumbai: Restaurant

The Indian Navy's International Fleet Review was a fine effort at naval diplomacy which the Government would do well to build on, writes INDIA TODAY's Principal Correspondent Sandeep Unnithan
in Despatches.

"The only obvious competition is in bhangra," say the Pakistani duo of the music group, Strings, in an exclusive interview with INDIA TODAY's Sonia Faleiro.
Interviews.