When Finance Minister Pranab Mukherjee rises in the Lok Sabha on February 16 to present the Interim Budget for 2009-10, he is likely to be troubled by one statistical thought. In the last 18 years, no political party whose government presented a pre-election Interim Budget has been returned to power after the polls. Nor could it, therefore, present the regular Budget for that year. That honour belonged to a different political party or coalition.
Since 1991, there have been four Interim Budgets. Only one of these was presented after the general elections in 1998, by Yashwant Sinha, because the finance minister needed more time to present a regular Budget, which he did in June that year.
The remaining three Interim Budgets - Sinha in March 1991, Manmohan Singh in February 1996 and Jaswant Singh in February 2004 - were presented before the general elections. In all these cases, the ruling party lost the elections and the regular Budgets for those years were presented by a government led by a different political formation.
Independent India has seen three more Interim Budgets presented before the general elections - in 1952 by CD Deshmukh, in 1957 by T T Krishnamachari and in 1962 by Morarji Desai. But these were the years when the Congress as the ruling party had virtually no opposition to contend with. On all the three occasions, therefore, the Congress returned to power after the polls and presented regular Budgets for those years.
The country's political scenario has not been the same since the 1990s. Interim Budgets before the elections have always been followed by regular Budgets from a different government.
Yet, political parties in power have shown little hesitation in opting for an Interim Budget presumably because of the obvious advantages they see in the opportunity it affords them to make a big-bang political statement on their economic achievements of the preceding five years and the promises they can dole out for the coming five years.
Sinha's Interim Budget in 1990, though, was an exception as his government had nothing much to talk about by way of achievements, formed as it was only a few months ago and the economy was facing its worst fiscal and balance of payments crisis.
The decision that he announced on the government disinvesting its equity in public sector undertakings up to 20 per cent and the promise he made on a sharp fiscal deficit reduction were aimed more at convincing the International Monetary Fund about the government's seriousness to restore fiscal discipline and less to please the electorate.
In sharp contrast, Manmohan Singh used the Interim Budget in 1996 to make a full-fledged election speech, recounting the PV Narasimha Rao government's achievements in the preceding five years and promising new and enhanced schemes to please the voters.
The concluding sentence of his speech was a virtual call to the electorate to vote the Congress back to power. "I have every reason to believe that when the time comes, our people will be discriminating enough to recognise the friendly hand that alone can help our nation to move forward on the road to peace and prosperity and preserve its unity and integrity," Singh said.
Jaswant Singh, in comparison, was quite restrained in his Interim Budget speech in 2004. He did talk a lot about the major achievements of the Vajpayee government over the previous five years, recalled the various import duty cuts that he had effected a few weeks before and announced the government's decision to raise the duty-free baggage allowance for travellers and cut the customs duty on dutiable goods brought in as baggage.
Both the decisions took effect from the day Singh presented his Interim Budget. In addition, he extended the scope of some schemes and announced a few new ones.
So, Mukherjee will have precedence to rest on if he were to decide on announcing some indirect tax changes that can take effect through notifications and presenting some new schemes to bolster his government's pro-poor image. Direct tax changes will be difficult, as these can take effect only after they are voted in Parliament, unlike indirect tax changes.
What he has to be careful about is not to present numbers on the government's revenue and expenditure that a new finance minister might have to revise again while presenting the regular budget. In his Interim Budget in March 1998, Sinha managed to do just that with the targets that his predecessor had set.
But Mukherjee's bigger concern may be whether he would prove to be the Congress' lucky finance minister who will break the jinx of pre-election Interim Budgets not returning the ruling party back to power.
