India’s Finance Minister Pranab Mukherjee presenting his budget proposals for the fiscal 2011-2012 to parliament on Monday
In no other country does the media practically drool the way it does in India over its annual federal budget. For India’s finance ministers giving budget speeches has become a performance art, neither part of which, neither performance nor art, do they live up to. How can they? The national budget, or any budget for that matter, is a numbingly boring, albeit essential, number crunching exercise.
The signature visual of the budget story is nothing more than the finance minister holding aloft his briefcase supposedly containing his closely guarded budget speech. In reality, we don’t know what the briefcase contains. For all you know it contains nothing. But the sense of purpose with which the finance minister poses with the briefcase outside the parliament you would think it contains the key to a fabled treasure.
To be accurate, it makes sense to guard the budget proposals zealously because any leaks could be used by corporations to game the system. Not that they don’t already do it, but prior knowledge of what the budget proposals contain could be particularly lucrative. So in some sense when the finance minister flashes the briefcase, as if telling the rest of the country that in it lies locked their future, it is not entirely wrong.
Just how excited the media gets about the budget proposals was evident while watching Dr. Prannoy Roy, India’s preeminent news anchor, ask Finance Minister Pranab Mukherjee a couple of times last night whether he would consider raising the income tax exemption limit to Rs. 200,000. In his latest budget presented yesterday Mukherjee has raised it from Rs. 160,000 to Rs. 180,000.
For those of you who may not follow such details what this means is that in India if you earn Rs. 180,000 a year (that is about $ 4,000) you will now be exempt from paying any income tax from next year. Dr. Roy, with his eye firmly on his audience, came across as if he was not just asking whether the finance minister would but actually importuning Mukherjee to make it Rs. 200,000 (about $ 4,500) right there on his show. In return, Mukherjee, a seasoned politician and a veteran of budget making, gave nothing away other than a wide smile.
India’s 2011-2012 budget is pegged at Rs. 12.58 trillion or about $ 280 billion. In contrast, the United States’ federal budget for 2011 as requested by President Barack Obama in February last year, is $ 3.83 trillion. To put it in perspective, America’s federal deficit this year is four a half times larger than India’s total budget allocations.
And here is one final point. The Indian budget addresses a population of 1.2 billion, while the US budget takes care of a little over 311 million people living in a land nearly four times the size of India. But I never see the US treasury secretary holding aloft a briefcase for the media and then going on to make a 110-minute speech followed by dozens of interviews discussing matters as thrilling as a new subsidy regime on farm nutrients and direct cash transfers to the users of fertilizers and kerosene. All very important and life-giving no doubt, but still not as emblematic as the income tax exemption limit for the middle class.