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As indicated in Economic Survey, the importance of delivery mechanisms there was not any substantial step to improve the same apart from the pilot smart card scheme for food grain distribution and a proposal to initiate the setting-up of a monitoring mechanism
for government schemes. All the populists measures or increasing programmes for women, children and minorities can't give the desired results out of them.

The proposal to waive off farmers' debt, which is estimated to cost the government around Rs. 60,000 Crore, has not gone down well with the market. I believe the same could have been better utilized, or at least partly spent, towards providing a thrust to economic growth. This will also give a body blow to pubic sector banks by announcing a loan waiver. Another way of looking at this is that not all loan waivers announced in budgets eventually happen, particularly not to the extent first indicated. On the other hand, a general waiver only spreads the culture of not taking farm loan repayment obligations seriously. Loan waiver is not necessarily the best way of tackling farmers' distress and every farmer's case is different. The only rationale behind this move is the impending elections and the danger of not doing something like this being interpreted by the opposition as being anti-farmer.

Another issue which is not addressed well in this budget is that the focus is on the management of supply side of food, market, capital inflows without any measures for demand side. This may not keep inflation under control in the years to come.

For achieving financial inclusion, Government has advised commercial banks, including RRBs, to add at least 250 rural house-hold accounts every year at each of their rural and semi-urban branches. These recommendations with the permission to allow individuals such as retired bank officers, ex-servicemen, etc., to be appointed as business facilitator or business correspondent or credit counselor will definitely encourage banks to achieve the Total Financial Inclusion. Role of NABARD, SIDBI and NHB are also emphasized to achieve financial inclusion.

On the overall government accounting, the FM said that the Revenue Deficit for the year would be at 1.4% as compared to the target of 1.5% for the year 2007-08. Similarly, the fiscal deficit for the year is expected to settle at 3.1% as compared to the budgeted target of 3.3%. For the next year, he has budgeted a Revenue Deficit of 1% and a Fiscal Deficit of 2.5%. He expects the direct taxes proposals to be revenue neutral and indirect taxes proposals to cost the government Rs. 5900 Crore. It is clear that he is banking on the economy to continue to grow at a fast pace. Tax buoyancy on account of high economic growth is what will help the FM find money for all the grand give-away that he has announced in the budget today.

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Dr. Gourav Vallabh is at present Professor (Finance) at XLRI Jamshedpur.
He is a Certified Financial Risk Manager (GARP, USA), Chartered Accountant (ICAI, India), Company Secretary (ICSI, India), Ph.D. (UoR, India), M.Com., LL.B.
Currently, he is also associated with Govt. of Rajasthan in the capacity of Honorary Advisor to Ministry of Revenue.