The much-awaited budget has been unveiled and discussed threadbare. The consensus is that faced with sky-high expectations, an economy mired in stagnation and inflation, depleted treasury and imperatives of fiscal consolidation, the finance minister Arun Jaitley has acquitted himself well with a budget which is centred on accelerating growth without sacrificing fiscal prudence. He has announced numerous measures to boost investment – both domestic and foreign – but refrained from populist giveaways. Addressing the woes of tax payers, pushing for economic reforms and reaching out to states for cooperation - he has not forgotten any of these.

The biggest positive of the budget is that it has no negatives. If the economy is picking up, this budget will not do anything to retard it. Except smokers and tobacco addicts, no one can claim to be worse off. If we put together the several little details given in Mr. Jaitley’s long and often tedious budget speech, a big picture does present itself. The budget is focused on the three most pressing challenges facing the economy: food, growth and jobs. Every provision, every detail in the budget is meant to address one of these challenges.

Critics have accused him of missing the opportunities, not outlining any long-term vision, not doing enough, falling short of expectations, not going the whole hog on something or the other; and they have a point. Mr Jaitley, however, knows his mind. Proceed slowly and cautiously, keep bolder actions for the future, but avoid getting caught on the wrong foot, do not ruffle too many feathers and do not spring nasty surprises - this seems to be emerging as the Modi government’s style of economic management. The budget follows the same approach: Errors of omission are acceptable but errors of commission are to be avoided.

Treading the line of least resistance, however, has its own costs and perils. It must be said without mincing words that the budget has belied expectations of a radical change and bold measures. Barring some laudatory references to Indian civilization and the River Ganga, Mr Jaitley’s budget speech could have been read by any Congress finance minister. Grandiose talk of a brilliant future, the gesture of tossing something to every vote bank, multiple schemes with token allocations and miscellaneous tinkering with duties - all these were nauseatingly Brand Congress.     

The Modi government seems to prefer continuity over change in economic matters. There is something to be said for this approach. But beyond a point, it erodes credibility of the new dispensation which has come to power on the promise of change. The UPA government passed several bad laws, introduced several flawed schemes, and did things which tarnished India’s image as an investment destination. People elected the Modi-led BJP to power to repeal those laws, scrap those schemes and reverse the wrongdoings. Instead, BJP has embraced those laws, appropriated those schemes, and shown no hurry to set things right.

In an act displaying lack of courage and poor judgment, the finance minister has chosen to retain the retrospective tax amendment implemented in 2012 which had seriously damaged India’s image as an investment destination. Yes, he did pledge that the NDA government will not bring about any change retrospectively that creates a fresh liability. He also said that for future, cases arising out of this amendment will be reviewed by a high level committee of tax body before initiating any action. However, the ongoing disputes at various courts and legal fora will have to reach their natural conclusion.

If a law is bad, it has to be scrapped and all cases initiated under it should be withdrawn. This is what was expected from a government that promised a clean break from a shady past. By retaining the law and opting for a “case-by-case” approach, Mr Jaitley has only kept the door open for further harassment, lobbying and corruption.     

Then again, it is surprising that Mr Jaitley has chosen to stick to his predecessor P Chidambaram's target of a fiscal deficit at 4.1 per cent of gross domestic product (GDP) for 2014-15. That target is based on revenue estimates that were dismissed by experts, as also by BJP, as bogus and inflated. To cite just one instance, excise duty collections are slated to rise 15.4 per cent as compared to last year’s 1.7 per cent.

Worse, he stuck to the fiscal deficit target of 4.1 per cent for 2014-15 laid down by his predecessor, after increasing the expenditure by about Rs. 31,000 crore and giving away a net amount of about Rs. 9000 crore in tax giveaways (on central account). Why? Because he has accepted it as a challenge!

Mr Jaitley could and should have restated the deficit numbers given by Mr Chidambaram so as to present a more realistic (even if worse) picture of government finances. Apart from exposing the numbers jugglery played by his predecessor, such an exercise would have eased the burden on him to lower the deficit. But now Mr Jaitley has blithely accepted the numbers given by his predecessor, which the BJP itself, then in opposition, had rightly questioned. In a stagnated economy with a poor monsoon and a tough external environment, chances of gross tax revenues growing 18 per cent are remote. He has a cushion in disinvestment and spectrum sale, but these are unlikely to make up for the shortfall.

Even if we factor in some economic recovery leading to tax buoyancy, the fiscal deficit ceiling is most likely to be breached. This is largely because Mr Jaitley has done little to phase out wasteful subsidies. The Centre’s total subsidy bill is pegged at Rs. 260,658 crore, almost Rs. 5150 crore more than the revised estimates for 2013-14. Beyond a vague promise of forming a new urea policy there is nothing to indicate how the government plans to rein in the burgeoning subsidy burden.

This is sad. Money which could have gone into creating more roads, ports, metro transport systems, airports, broadband lines to every village, industrial corridors, smart cities etc. will continue to be spent on subsidies on fuel, fertilizers and food. The only way to end subsidies without breaking the back of the middle class is to slash the size and non-productive expenditure of government by abolishing some ministries and consolidating many more. Mr. Modi has begun that exercise, but it still has a long way to go.  

The Modi government, which came to power on a promise of change, appears too reluctant to junk bad ideas and policies of the UPA government. There is talk, but no details, of revamping the rural job scheme; but there is no sign of any rethinking of the food security scheme which has the potential to bankrupt government finances, disrupt the food market and ruin Indian agriculture. The same goes for another dangerous UPA initiative: Aadhaar scheme. The only real beneficiaries, apart from those who make the cards, will be Bangladeshi infiltrators.

The government needs to check its enthusiasm for cash-guzzling grandiloquent ideas like bullet train, which will only serve the elite. That money (estimated at Rs. 60,000 crore) will be better spent on expanding and upgrading the railway network, making train journeys of ordinary people safer, making trains run on time, ensuring confirmed reservations on all trains on demand all through the year, providing more comfort in second class compartments, and so on.    

Yet it would be a mistake to dismiss this budget as a non-event or inconsequential. It contains several welcome announcements and, as a statement of intent, points in the right direction. This is a Budget that needs to be allowed time to work and must be followed by other, more radical measures once the economy starts getting back on its feet.