Budget 2008-09 has turned out to be on expected lines i.e. largely a balancing act along with the populist measures announced. Increase in income tax exemption limits, greater spending on agriculture, health and education programmes and concern for farmers, which is reflected in the waiver of farmer loans, all point towards the government’s eye on the election next year. 

However, it would be pertinent to note that these measures would lead to greater spending power by consumers and farmers, which would ultimately be a positive for our economy. 

The common man has a lot to cheer about the Budget presented by the Finance Minister. The reduction in effective income tax burden for the urban population is a considerable positive for them considering the new tax slabs proposed by the FM. 

At the same time, for rural India, it has been nothing less than a dream Budget as lakhs of farmers would benefit from the loan waiver and the fresh loans that they would become eligible for. Apart from this, increase in government spending on agriculture, education and healthcare benefits all. 

For the economists, the government has more or less stuck to the fiscal prudence by targeting a lower fiscal deficit next year despite the above and a near Rs 36,000 crore increase (up 18% yoy) increase in planned expenditure. All the above measures indicate that greater consumer spending would ensue in the coming couple of years.