It is a huge balancing act, especially after what his predecessor P Chidambaram had delivered both in 2008-09 and in the 2009-10 interim budget. Conservatively estimated, Chidambaram's last two budgets had created at least a Rs. 4,00,000-crore hole in the government's purse. That is about 8 per cent of India's GDP.

Chidambaram could not have done anything better through routine taxation and other measures to raise higher resources from a falling economy since early 2009 and compress government spending at the cost of the common man in an election year.

Some of those measures have just started yielding good results in terms of industrial production and generating market demand. It could be rather risky to reverse those incentives, tax concessions and lower levies so early in the day. In fact, there exists a strong case for lowering both the direct taxes and indirect taxes and at the same time raise the tariff and non-tariff barriers to cheap imports to further boost consumer spending and protect industry against the invasion of Indian market by products and services from other recession-hit countries, China poses the biggest of them.

The personal income tax at the lower levels needs to be further pruned as this section of the population is the biggest spender on goods and services. An additional disposable income will have a strong positive impact on the demand of all goods and services, including housing. Also, the budget must continue to bring cheer to the secondary market to indirectly attract higher levels of foreign direct investments (FDI) in the primary market. Thanks to the drastic cut-down of interest rates on savings, the domestic savings rate is bound to be affected. Additional FDIs can bridge the gap. A strong and cheerful stock market always induces higher FDI inflows as it ensures a bigger valuation of the on-ground assets owned by a foreign investor.

Then, there is also concern over the continuing lip service to social security for the unemployed, the old and the pensioners. Senior citizens and industrial pensioners, many of whom earn less than Rs. 1,000 per month as pension, are among the most neglected lot and deserve a better deal from the new government. It would be nice if this budget provides some relief to them.

Senior ministers in the government with a modest background and feet-on-the ground like Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee are unlikely to disagree that the hapless community of senior citizens deserve to be treated with a little more compassion and dignity. The government must find ways to provide at least some modest financial security and mandatory low-cost healthcare for those who gave their youth to build the country's economy and protect its security. Insurance companies have practically disowned them. A 0.5 per cent higher interest on fixed deposits with banks can hardly protect their financial security in a market which has witnessed a big drop in the bank deposit rates by almost four per cent in the last six months alone. A direct long-term borrowing from senior citizens at higher interest rates could benefit both the community and the government.

While the government's schemes for the unemployed rural youth have been well received by this hitherto neglected population, the deteriorating conditions of rural health, hygiene and education standards are a matter of grave concern. The social sector has long been neglected. The attention to sports, women's education and rural entertainment alongside the creation of rural employment could automatically lead to better family planning. India cannot afford the luxury of the present rate of population growth, which is higher than the annual food grains production rate. This is one area that the entire government should be concerned about. And, the Union Budget must provide fiscal incentives to smaller families and child adoption.

People's expectations from the new government are enormous. The top-down economic reform and planning need to be replaced by the bottom-up measures. The growing Maoist and extremist menace in several neglected, highly impoverished parts of the country, of which Lalgarh is just a small one, is threatening to destabilise the government in several states. Even in the last Lok Sabha election, many villages across the country chose to boycott polls which might have helped many undeserving political party candidates to win the election. These people, neglected for generations by both the central and state administrations, must be made part of a vibrant and vigilant civil society.

Resource generation to improve the country's overall economic health on the one hand and provide opportunities and survival packages for the alienated on the other, is by no means an easy task. One way to handle the task is to avoid wasteful expenditure on administration, which has been eating up lion's share of the government's allocation on economic and social development projects and programmes. The administration must compress itself and account for every penny it spends.

The Finance Ministry itself needs to be cleaned up. Those unscrupulous officers who help greedy businessmen and entrepreneurs make billions of rupees in unaccounted wealth must be identified and given exemplary punishment. The whole revenue department stinks. Its latest involvement in Ramalinga Raju's massive embezzlement of funds and his alleged acquisition of 12,000 acres of land in Andhra Pradesh, mostly under fictitious names, is only the tip of the iceberg. India has produced more multi-billionaires and multi-millionaires in the last 18 years than any other country in the world. It also boasts the largest impoverished population.

The biggest challenge facing any Finance Minister is to try to effectively stop the revenue leakage, especially the large ones where the government is losing thousands of crores of rupees in tax incomes, and the systematic laundering of black money by businessmen, politicians and bureaucrats with the help of their accomplices at home and abroad. Even a modest progress in this adventure can help the government raise large resources, which in turn can address the concerns of allocation of larger funds for development and the resultant fiscal deficit. Unfortunately, few were genuinely prepared to bell the cat.

The will to control big-ticket corruption in the government and to break the deep-rooted businessman-bureaucrat-politician nexus has always been missing. The Finance Minister could avoid a real tight rope walk, trying to balance his budget and yet make it truly pro-people, through some radical on-ground tax compliance measures and their strong enforcement. If he succeeds, he and his party will win immense popularity among the people and the young party men in Lok Sabha who are serious about building a new India reasonably free from corruption and injustice. (IPA Service)