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

V QUICK-FIX SOLUTIONS FOR GROWTH

BECAUSE there is no lobby for economic problems like poor infrastructure or high cost of capital.

This is an area of least politics, and also least action. Beyond the politically convenient fear of imports, what has really made Indian business, and even agriculture, unequal to foreign competitors is obsolete and costly infrastructure and high rates of interest. But there is virtually no political party or politician who will question Sinha's budget on these matters. Some indirect concern is raised by parties like the CPI(M) which has never been in government at the Centre. Says Chatterjee: "In its rush to please foreign industry and promote private business, governments have lost sight of their basic task of infrastructure building." On the extreme are parties like the Rashtriya Janata Dal. Its leader Raghuvansh Prasad Singh alleges that "the Government is selling the country to foreign companies".

Most of the dozen-odd politicians INDIA TODAY spoke to expressed no opinion on interest rate. That reflects how one of the most relevant issues for Indian industry today is not worth a political cause. Compared to most developed countries, the cost of borrowing is 5-6 percentage points higher in India. That lends a substantial cost advantage to foreign companies over their Indian competitors.

To add to the woes, not every company in the country is eligible to borrow capital from abroad. Interest rates on borrowing can only come down if interest rates on lending (deposits) also fall. Though there is a strong possibility of Sinha reducing interest rates on small saving deposits and pension funds, such a move will be challenged by many political parties. And in doing so these political parties will do more harm to Indian industry than a more open import system.

		Rashtriya Janata Dal NO: Life is a box of conspiracies, you never know what you get "Policies will be dictated by MNCs and big corporates, not the poor." Raghuvansh P. Singh

VI TAXES WON'T RISE FOR THE
NON-TAXED

BECAUSE there is no will or support to tax those who are still out of the tax net.

A not so well-known fact of Sinha's term in the North Block has been a reversal of trend in tax rates. While his two heavyweight predecessors reduced tax rates, Sinha has raised the rates of all major taxes through one surcharge or another. Since taxpayers are supposed to be rich, Sinha didn't face any political opposition in raising taxes. Defends Shettigar: "Tax rates in India may appear high because of the surcharges, which are temporary. Since the country has been moving towards a low-tax rate regime, attempts should be made to expand the tax base." That is where the political will has been lacking. Despite being in the realms of discussions for decades, no government has dared to tax incomes of rich farmers. Surprisingly, it's the Left parties that have been demanding such a tax. "We will support an income tax on rural rich," assures Chatterjee. But don't bet on Sinha taking that assurance seriously. Exporters are another class which continues to remain outside the income-tax net. But Chidambaram having once imposed and withdrawn tax on exporters income, Sinha will not stir the hornet's nest. What he will surely do, however, is to increase customs duties on select products that will be moved to the open-import regime from April 1.

Eventually, Budget 2001 can only be as good as politics allows it to be. At a time when most NDA partners are baring their vested interests and all political parties, including the BJP, have an eye on the ballots that will be cast in less then two months from the day the budget is presented, politics will dominate the economy more than it normally does. Rationalises Andhra Pradesh Finance Minister Y. Ramakrishnudu: "Economic reforms may sometimes mean taking two steps forward and one backward if it is to be implemented with a human face." Only sometimes that one step backwards goes much farther than the two steps forward.

-with Amarnath K. Menon

		CPI(M) YES: It helps when those should be taxed are also class enemies "We'll support imposition of income tax on the rural rich." Somnath Chatterjee

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.