This is a budget for less government and more private initiative, more private consumption and more private investment. The budget makes a serious attempt at consolidating government finances, and thus enlarges the monetary space for you and private enterprises to buy, save, borrow and invest. This wasn’t expected to be an epoch-making budget and it hasn’t quite turned out to be one. But it does not disappoint markets, businesses and investors because it has a number of positives. The biggest of those is the attempt it makes to rein in government spending, especially subsidies that are wasteful and corruption-ridden. Direct cash transfer of three major subsidies — on kerosene, cooking gas and fertiliser — to the targeted beneficiaries to be identified using Nandan Nilekani’s project for UID numbers has to wait till April 2012. But this budget makes that commitment. In content and character, the move is as radical as any economic reform could be. Then, there are those strong reform signals meant to draw in FDI and FIIs funds, including a possibly game-changing step of letting foreign investors directly invest in mutual funds here, subject only to the know-your-customer (KYC) norms. There is also a commitment to push half-a-dozen pieces of pending reform legislation through Parliament. Some of those, like the changes in insurance laws for enhancing foreign equity participation to 49 per cent from 26 per cent and the legislation to give statutory powers to the pension fund regulator have been languishing for as long as seven years. Their enactment would be a huge step forward. More liberalisation, including the opening up of multi-brand retail, is also a possibility as the budget pledges a comprehensive review of the FDI regime as early as in April. Privatisation or strategic sale of PSUs was never on the UPA government’s agenda. But finance minister Pranab Mukherjee continues to pursue an ambitious programme of selling minority stakes in PSUs. While he has chosen to reschedule divestments in ONGC and SAIL till the markets see better conditions (and had to be satisfied with only Rs 22,000 crore this year), he has targeted to raise Rs 40,000 crore in financial year 2011-12. The PSU disinvestments this year, drew five million retail investors to the market. The programme next year would thus, have a great potential for retail participation. As far as taxes are concerned, the budget is quite neutral. While it gives away Rs 11,700 crore in income tax and corporate tax concessions, it mops up almost an equal amount by expanding the excise and service tax net. But these tax adjustments have a broader purpose. They are meant to align the provisions to the two bold tax reforms initiatives in the offing, namely the direct taxes code (DTC) and the goods and services tax (GST). The budget pushes both: There is a clear commitment to make DTC effective from April 1, 2012, while it is only hoping to reach a grand bargain with the states to implement GST from the next financial year. The centre has done its part. The history of budgets in the past 20 years has only a few instances of finance ministers being true to their basic task of budget-making. This budget in that sense is a remarkable attempt at balancing the books. Mukherjee, cautious politician of long standing that he is, has preferred not to flaunt the slew of bold reforms that’s implicit in the budget. He has instead presented an understatement – the job of a diligent accountant – that was also the need of the hour. This is a budget designed to bring inflation down to 5 per cent, step up economic growth to at least 9 per cent and check interest rates from rising further. This is a budget that also seeks to bolster defences against economic instability that may arise in the wake of external shocks such as global oil and commodities price spiral. Mukherjee has done this by attempting a major fiscal correction. Here, he has exceeded expectations, cutting spending and borrowings as a percentage of GDP this year and the next, and laying out a credible fiscal consolidation programme for the next three years. For finance minister and UPA’s No 3, the numerical ‘3’ is, by his own admission, lucky. He would need all the luck and prayers, including to Rain God Indra and Goddess of Wealth Laxmi, in making his third budget a success in number marksmanship. If he hits the bull’s eye, this would go down as a landmark budget.