India's Budget 2014 prudent and practical

INDIA'S Finance Minister Arun Jaitley presented his maiden budget on Thursday, bringing an end to an unprecedented run-up of hope and hype. His earlier promises that the budget would be bold and would avoid "mindless populism" had raised hopes and sent the benchmark BSE stock index to a record high. The expectation was for spectacular change and policy reforms in almost every aspect of the economy.

Let's take a step back and set aside the fact that Budget 2014 is not very different from the last budget or the one before that. In my view, the essence of the budget lies in what the finance minister said at the start of his speech: "The steps that I will announce in this Budget are only the beginning of a journey towards sustained growth of 7-8 per cent or above within the next three to four years, along with macroeconomic stabilisation that includes lower levels of inflation, lesser fiscal deficit and a manageable current account deficit."

Overall, the budget seems to have delivered in line with market expectations. Clearly, the finance minister has stayed prudent and attempted to strike a fine balance between aspiration and the bitter pill of reality. During his budget speech, he said: "Fiscal prudence to me is of paramount importance because of considerations of inter-generational equity."