Good Economics,
Risky Politics
Defying the pressures of politics, Finance Minister Yashwant Sinha has come forth with a bold, hard budget. He has committed the Government to a slew of daring economic reforms through this year's budget. But, beyond the initial euphoria generated by sheer promises, lies a rough road to fulfilling them. Will the pressures of coalition politics and an irrational Opposition allow him to deliver?

Interview:
Yashwant Sinha
"It is my budget,
not the PMO's."

Smeltdown
The NDA Government handsomely wins a vote moved by the Opposition in the Lok Sabha against the privatisation of Bharat Aluminium Company (BALCO), but it should now start worrying about the poor response to bidding for strategic partnership of public-sector units.

Progress Report
With an overwhelming response from readers, the CARE TODAY society had funds flowing in from all quarters to aid it in its efforts to help those rendered homeless and jobless by the devastating earthquake of January 26.

Reeling Estate
Gujarat is witnessing a strange phenomenon with the two hands of the Sangh Parivar, the RSS and the VHP, earning public goodwill and the BJP leadership finding itself in the hot seat over links with the building mafia.

Bust to Dust
International outrage doesn't deter the Taliban militia from pushing ahead with its plan to destroy historical statues, including the 2,000-year-old Buddha statues in Bamiyan.

Piecing the
Ahar Puzzle Excavations of sites from the 4,500-year-old Ahar culture provide clues to the link between the Harappans and their predecessors.

COVER STORY: UNION BUDGET

BORROWING RATE CUT
In Everybody's Interest

On the face of it a 1.5 percentage point cut in interest rates on small savings did trigger the expected reaction: howls of protest from the Opposition benches and sighs from allies. Sure, you could say, the small investor entrusting his money to the Public Provident Fund, the Kisan Vikas Patra or the National Savings Certificates has been hit badly-especially the retired folks-considering that the current rate of inflation (WPI) is over 8 per cent. The fact though is that the small investor has been getting returns of over 11 per cent even when the rate of inflation was averaging 4 per cent for over a year and 6 per cent over the past five years. Secondly, even the 9.5 rate of return isn't too bad if one considers that it is tax free. Also it isn't that there are no avenues which offer similar or better tax-free returns. There is the bond market which already sees over a dozen tax-free bonds and there are mutual funds. In fact, Unit Trust of India Chairman P. Subrahmanyam says, "The cut in interest rates will drive more people to invest in money market mutual funds and bonds."

High deposit rate have kept lending rates-the cost of capital-high. The Government's move to align these rates with the cost of living will bring down interest rates across the board. Already the Reserve Bank of India has slashed the bank rate (the rate at which it lends to banks) to 7 per cent. This will bring down the interest burden, the cost of new borrowings as also the total debt of the economy.

There is some fear that state governments, which depend on small savings for their borrowings, may feel the pinch. But that will be temporary. Besides, at the end of the day, they too will have access to cheaper funds. The cut in interest rates will also bring down the cost of capital for companies, enabling them to compete better, invest more and create jobs and income. There is also good news for the consumers-lower interest rates mean cheaper hire purchase. The moral: what's good for the government is good for the individual.

-V. Shankar Aiyar

MetroScape
Personality Matters Those behind the Grasim Mr India contest think it is one up over other male pageants.
But is it?
more...

Looking Glass

Mumbai: Swarovski Boutique

Delhi: Colours 'n' Spice

Delhi: Mindscapes

The Keoladeo National Park Sanctuary in Bharatpur gets an unprecedented number of migratory birds due to the dry spell last year. But experts feel another drought could be disastrous, writes INDIA TODAY's Supriya Bezbaruah in
Despatches.

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