The wide chasm between promises and deliverables was thrown into stark relief by the time Finance Minister Pranab Mukherjee completed his Budget speech on Friday.
A raging fiscal deficit at 5.9 per cent of the GDP; lifelines thrown to stressed sectors such as infrastructure, aviation and power; and banks, financial institutions as well as regional rural banks being recapitalised to the tune of Rs.15,888 crore - the government was busy playing nanny to one and all.
A huge opportunity was muffed to put what is now seen as an ailing economy back on the rails. Coalition compulsions notwithstanding, the government should have shown courage while delivering what may well be the last big push before the 2014 showdown at the hustings.
Instead, the Budget was devoid of any bigticket reforms and could turn out to be inflationary. Consumers will have to shell out more for goods and services with Mukherjee increasing excise duties across the board on all commodities from 10 per cent to 12 per cent, effecting a similar hike in service tax and bringing all services, barring 17, under the tax net.
The finance minister did try to sugarcoat the bitter pill by raising the income-tax exemption threshold from Rs.1.8 lakh to Rs.2 lakh, but this will provide little solace because the concession works out to a mere Rs.2,000.
Mukherjee invoked Shakespeare during the Budget presentation to illustrate the dilemmas of his job, much like the prince of Denmark. Quoting from Hamlet , he said: "I must be cruel, only to be kind," as he sought to raise an additional Rs.27,280 crore through customs and central excise levies and Rs.18,660 crore through service tax.
The spike in levies will massively upset the calculations of household budgets - already stretched owing to inflation. In fact, industry fears consumer demand may get choked.
Bajaj Auto chairman Rahul Bajaj exuded pessimism: "Excise duty and service tax hikes are negative steps. I don't see any growth trigger for industry in the Budget."
There are other minor concessions, too. The upper limit of the 20 per cent tax slab has also been increased from Rs.8 lakh to Rs.10 lakh to provide a modicum of relief to tax payers in this category. Those with an income above Rs.10 lakh will, however, continue to pay 30 per cent tax.
Interest income of up to Rs.10,000 in saving bank accounts will be exempted from tax and a deduction of Rs.5,000 will be allowed for preventive health check-ups.
The flip side is that substantially higher amounts will have to be shelled out for all goods such as cars, refrigerators, airconditioners, cosmetics and confectionary as a result of the 2 per cent increase in excise duty.
The excise duty on big cars has been increased from 22 per cent to 24 per cent. The luxury segment cars that attract a mixed rate of duty of 22 per cent plus Rs.15,000 per vehicle will now face a composite ad valorem excise duty of 27 per cent.
Charges on services such as telecom, air travel and hotels will also head north. Apart from a small negative list of 17 items that includes healthcare, services provided by charities and services of sportspersons, all other services will come under a 12 per cent tax.
Godrej group chairman Adi Godrej said: "The Budget was along expected lines, given the coalition pressure. It will increase the cost for both industry and consumers."
Gold and platinum will also turn dearer as the Budget proposes to double the customs duty on these precious metals. The measure is aimed at reducing the surge in gold imports that is contributing to the rising trade deficit and weakening the rupee.
Industry experts are of the opinion that this could lead to an increase of 3-4 per cent in the prices of gold.
Mukherjee has hiked the customs duty on imported cars and SUVs as well, from 60 per cent to 75 per cent. Similarly, the duty on high-end imported bicycles has been jacked up.
The numbers clearly reflect the cost-benefit scenario as far as consumers are concerned.
Mukherjee said his proposed concessions on income tax will result in a net revenue loss of Rs.4,500 crore for the year. On the other hand, the gain from indirect taxes - including excise, customs and service tax - will add up to Rs.45,940 crore.
The finance minister said he had made a determined attempt to come back to the path of fiscal consolidation in the budget for 2012- 13 by pegging the fiscal deficit at 5.1 per cent of the GDP. However, this seems to be an uphill task.
The Budget left untouched corporate taxes and the peak customs duty, and gave tax concessions to infrastructure sectors.
The Opposition parties slammed the Budget, saying it would further burden the common man. The general thumbs down notwithstanding, PM Manmohan Singh and Mukherjee believe that the Budget will put the economy on the path of growth.