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Sinha's budget is a mix of the bold and the beautiful

No matter what critics say of Yashwant Sinha's budget, one thing has to be granted to the finance minister -- he has shown courage to introduce a number of pending schemes that his predecessors left on the back burner because of political pressures and the lack of will.

His accession to the post of finance minister was in somewhat controversial circumstances, and the word in both media and political circles was that he was a bad choice for that portfolio; that Jaswant Singh, the prime minister's own candidate, would have been far more suitable.

Sinha has always maintained a low profile since his entry into the ranks of the BJP -- perhaps because he is still not used to the inner-party culture, also probably because he has to contend with some jealousy from within.

Against this background, Sinha's Budget comes as a good answer to his many critics. Among his innovations, opening up the insurance sector for private companies, issuing credit card facility to farmers, the Samadhaan scheme for pending income tax disputes, the one-page income tax returns form, imposition of duty on foreign goods to give a major boost to Indian industry, PIO cards for Indians abroad, increase in equity of NRIs in Indian companies, and bringing stability to tax rates are the most obvious, and most laudable.

Though P Chidambaram has called it a timid budget, even he could not help but appreciate some of Sinha's proposals. As for Chidambaram's predecessor Dr Manmohan Singh, the former finance minister did not find any issue to attack Sinha's Budget on.

Another important step that has not received due credit in post-Budget analysis is Sinha's decision to appoint a special officer at every level, to help foreign investors get their projects cleared within a maximum of 90 days. The officer, Sinha expressly specifies, will be held responsible for any delays, any hassles incurred by the investors. This, obviously, is a step towards boosting investor confidence in a country seen as bureaucracy-ridden.

Another courageous step is the one relating to closing down non-viable PSUs, and allowing disinvestment in other PSUs including Indian Airlines. This will earn him the wrath of Opposition parties and of trade unionists. Sinha needs to face the critics boldly, and to implement his agenda at the earliest.

The steps he has taken have long been mooted, at various levels by various officials, and I don't have a clue why successive governments pussy-footed on putting them into practise. Some of these schemes, in fact, had been on the anvil during Chidambaram's time, but his friends in the government, as also the BJP which was then in the Opposition, blocked him from announcing them.

Foreign investment companies are disappointed with the Budget because of what they see as a dearth of attractive schemes, no real plans to help the capital market and a seeming mollycoddling of Indian industry. I think Sinha has deliberately gambled here, to extend major support to domestic industry as part of a bid to halt recession. Like most gambles, this one could be dicey -- if it works, he is a hero; if it fails, he will be the one facing the flak.

The home ministry, meanwhile, has its own thoughts about the PIO scheme. Officials in the ministry indicate that identities of people applying for the card will be closely scrutinised before the cards are issued. The government, home ministry officials tell me, are determined to be selective while issuing PIO cards, and people of Indian origin living in countries like Pakistan, Bangladesh and Sri Lanka may not be allowed to avail this facility.

Indians abroad have been demanding the dual passport facility for quite a while now. The subject had been raised by Indian organisations abroad, during former prime minister P V Narasimha Rao's tours. Rao, at the time, had said he would look into it.

However, whenever he, or indeed any prime minister discussed the dual passport option, the strongest objections had come from the home ministry, keeping in mind Pakistan, Bangladesh and the Tamil-dominated area of Sri Lanka. The home ministry also has marked reservations about certain extremist groups living in Canada. And it is these combined reservations that have, thus far, kept the dual passport scheme in abeyance.

Sinha has been always a great supporter of overseas Indians -- and it is this mindset that prompted him to come up with the via media option of introducing PIO cards, instead of the politically contentious dual passport scheme. Though the name differs, the PIO card, when issued, is expected to give the overseas Indian all the benefits that could accrue from holding an Indian passport. Essentially, the card entitles you to come to India at any time, without need of visa, and also enables you to participate in business activities on Indian soil.

Sinha had some trouble persuading the home ministry to back his scheme. Ultimately, it was decided to issue the card selectively. It was, further, decided that Indians in Pakistan and other neighbouring countries would not be given the card -- this, mainly because the home ministry has been flooded with intelligence reports that a large number of Indians in Pakistan are on the ISI rolls, as Indians in Sri Lanka are believed to be part of the LTTE network.

Indians in Bangladesh are being deprived of the facility not because of any direct suspicion, but because of massive exodus from there and infiltration into India.

The idea behind the scheme is obviously to give the NRI a stake in his mother country, the thinking in the finance and foreign ministries being that once the NRI begins taking an interest in India, he will want to invest, and this in turn will boost the economy and, in the process, negate the impact of the sanctions.

Budget '98