India Budget 2010

Expectations build up leading up to D-day. A sweeping majority at last year’s polls, no major state elections this year, GDP growth at 7.5% this year and >7% next….the Congress does seem to be sitting pretty to push through far-reaching reforms at this year’s budget.

Looks unlikely to me though.

There is a faction in the country that believes India managed to sidestep the global mess as it was relatively unintegrated with the global economy. With persisting uncertainty globally, the Congress is unlikely to rock the boat with sweeping liberalization reforms….the favorable alignment of stars notwithstanding.

The Congress faces a tight rope walk ahead, slashing the 16-year high budget deficit while continuing to support growth. Reversing the stimulus packages is another grey area. All this leads me to think that the era of monetary tightening is close…there’s a good chance tax payers may emerge an unhappy lot post-budget.


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