My initial reaction to the budget 2004 is that of mild dissapointment. The FM has not really taken any bold step. This seems to be more of a political statement, rather than an economical statement. I guess he will be more proactive in the next budget, which will come after only 7 months.
Some observations on the budget:
1. There are too many sops and exemptions promised. Any exemption or sop is always contrary to the spirit of free markets. Also, it is always easy to intervene in the free markets, but it is extremely tough to get out of it, as vested interests make sure that the imbalance remains.
2. For all the talk of agricultural development, the FM has just put more money in the same delivery machinery, which has repeatedly proved to be a failure. There is some good news in the form of the experiment to be conducted in some districts to introduce food stamps in place of the PDS. I hope this proves successful, and is able to overcome the powerful lobbies to replace the PDS completely.
3. The rebate given to the people with income less than 1 lakh is rubbish. A person with a salary of 1.1 lakhs will actually have lesser money in his hands at the end of the day than a person with salary of 99 k. The FM should have actually changed the tax slabs. The FM has done nothing to relieve the middle class of the tax burden. Infact he has increased the burden by introducing the education cess. Of course, there is no move to reform the education system. So it is going to be more money down the drain.
Have no time.. so will put more thoughts on the budget later on.