Government

India's Budget Day, Full of Sound and Fury


Mukherjee is proposing to raise taxes and cap subsidies

Photograph by Mustafa Quraishi/AP Photo

Mukherjee is proposing to raise taxes and cap subsidies

Jeering and chanting echoed around the Indian Parliament on March 16 as members gave a hostile reception to Finance Minister Pranab Mukherjee’s budget. Waving their arms and fists, opposition politicians stood up repeatedly during the two-hour speech to shout insults and taunts at Mukherjee and the governing coalition dominated by the Congress Party as speaker Meera Kumar repeatedly appealed for calm. “Let’s have order in the house,” she pleaded in vain. “Please sit down.”

Budget Day in the Indian capital is in some ways a close follower of the British equivalent. In Britain, for years, the Chancellor of the Exchequer ceremoniously paraded into the House of Commons clutching a Victorian-era “budget box,”a kind of briefcase. In similar fashion, Mukherjee clutched a red leather briefcase containing the budget as he entered the Indian Parliament building.

British Chancellor of the Exchequer George Osborne displays the budget boxPhotograph by Rupert Hartley/BloombergBritish Chancellor of the Exchequer George Osborne displays the budget box

Raucous catcalling is a parliamentary tradition in Britain as well, but the British pale in comparison to the Indians. Unlike more restrained legislatures in places such as the U.S., speaking out of turn, shouting slogans, waving placards, and storming into the well of the chamber to force adjournments are common in India. In December, a regional lawmaker snatched papers from a minister as he spoke and flung them across the chamber to derail a vote on setting up an anti-corruption authority. Opposition parties and coalition allies accused the ruling Congress party of organizing the fracas because it did not have the numbers to win. “Our politicians at times behave like an out-of-control mob,” says Prem Shankar Jha, a political analyst and former aide to ex-Prime Minister Vishwanath Pratap Singh.

In regional assemblies, behavior can be even worse. In Karnataka, Women and Children Welfare Minister C. C. Patil and two other legislators resigned last month after allegedly being caught watching porn on a cell phone in the assembly. In Bihar’s Parliament in 2010, the speaker was pelted with shoes and chairs, while lawmakers wrestled on the floor following a debate over a scandal. In the same episode, a Bihar legislator, Jyoti Singh, responded to being ejected from the chamber by hurling flowerpots at security personnel. “Sometimes I am embarrassed to be an Indian when you see scenes like that,” says Jagdeep Chhokar, a founding member of the Association for Democratic Reforms, a New Delhi watchdog group that campaigns for better governance.

At a time when business has been urging the government to step up reforms to revive the economy, about 30 percent of the national Parliament’s time last year was wasted as lawmakers forced adjournments.

After eight years in power, Prime Minister Manmohan Singh’s government, faced with a series of high-profile scandals reaching to the heart of his Cabinet, as well as inflation above 9 percent for most of 2011, has been vulnerable to attacks by opposition politicians. The government passed just 22 laws last year, the second-lowest number since 1952, according to New Delhi-based PRS Legislative Research.

As Finance Minister Mukherjee outlined plans to raise taxes and cap bloated subsidies, he borrowed from William Shakespeare’s Hamlet, telling lawmakers, “I must be cruel only to be kind.” The government proposed restricting subsidies to less than 2 percent of gross domestic product while raising service and excise taxes to 12 percent, from 10 percent, to tame the widest budget deficit among emerging economies.

Economists are skeptical that the government will meet its aim to reduce the budget deficit to 5.9 percent of economic output after exceeding its budgeted spending target in eight of the last 10 years. Yashwant Sinha, the former finance minister who is a member of Congress’s main rival, the Bharatiya Janata Party, says this was a “non-budget” and “an accounting statement with no vision.”

The bottom line: India’s government has failed to hit spending targets for eight of the last 10 years. The deficit is deepest among emerging economies.

MacAskill is a reporter for Bloomberg News in New Delhi.

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