• Finance Minister P. Chidambaram presented the much-anticipated budget that looked and felt like an election-year budget. Therefore, with the economy doing well, the thinking seems to not do much; consequently, the budget is very unimaginative. The Government borrows 22% of its budget and pays 21% in interest. No new taxes, no oil, natural gas, and kerosene price increases, no new economic reforms, duty cuts some items for smaller cars, some ready made food products, and made significant modifications to the unpopular fringe benefit taxes. He did raise the service tax marginally, securities transaction tax by 25%, and minimum alternate tax to 10%. The National Rural Employment Guarantee Scheme (NREGS) was allocated USD 3.3 billion; defense expenditure budget was increased by USD 1.3 billion; irrigation outlay to USD 1.2 billion; rural health increased to USD 1.6 billion; rural sanitation to USD 150 million; children mid-day scheme to USD 1.2 billion; and farm credit corpus was raised to USD 35 billion to benefit another 5 million farmers. Abolishing the 1-6 rule that required major purchases be allowed only for tax paying citizens, he projected revenue increases from direct tax to be USD 1.2 billion and indirect taxes at USD 700 million. He projected a gross national product growth of up to 8% and revenue deficit of 2.1% and fiscal deficit 3.8%. He did not say how he plans to bridge the deficit gap and did not reveal plans to increase the tax base; revenue from income tax continues to be a low 11%. The only far-sighted programs in the budget that would help industrial growth are plans to make specialized industrial towns, focus to make India a textile hub, and increased focus on creating semiconductor fabrication units. Despite increased social expenditure, communist allies complained of lack of adequate investments in agriculture or employment generating projects. They accused the Government of departing from the common minimum program of the United Progressive Alliance (UPA) and letting the aam admi or common man down. The Indian industry commended the budget as practical. 

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Democracy, Politics and Judiciary

• Uttar Pradesh (UP) Chief Minister Maulayam Yadav’s Government survived a no confidence motion after Allahabad High Court termed a 40-member Bahujan Samaj Party (BSP) defection to the Samajwadi Party (SP) illegal. The court disqualified the defected members but as the no-confidence motion was being called, members crowded the well angering the opposition who walked out on the proceedings. The Congress, who is a state and national ally of the SP, joined the opposition in the walkout. All the parties opposing the SP want it to resign, a demand it has already rejected. Of late, the SP is embroiled in a several serious Constitutional breach issues including taped conversations of Yadav and his deputy Amar Singh plotting to remove an inconvenient High Court judge and demanding bribes from industrialists. A senior Cabinet Minister offered a bounty for killing “the Danish cartoonist” for depicting Prophet Mohammed in a distasteful manner.

• Delhi Police Commissioner Krishna Kant Paul said that his organization would challenge the verdict in the “Jessica Lal case.” A son of a former Federal Minister and 8 other accomplices shot dead a barmaid before scores of witnesses and fled the scene. After blotched investigation and delayed justice, Manu Sharma, the accused, drove away smugly in a Government vehicle. Mounting grass-root and positive political pressure has brought a lot of pressure to bear on the police. Paul said that he had written a 2001 report implying that some peers were purposely smudging the case but the police decided not to do anything because it was in court and that could “vitiate the trial.”

• Pakistan reported that the bird flu hit two districts in the North West Frontier Province (NWFP). Local press reported bird flu cases in Pakistan Occupied Kashmir (PoK) but Government officials said that they have sent samples to a lab in England for confirmation. Prices of chicken have been falling since mid-February after news of outbreak in India. Pakistan does not have reliable medical systems to confirm or manage a bird flu outbreak.

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• The Borders Security Force (BSF) killed two self-styled commanders and another militant belonging to the Hizb-ul-Mujahideen in Kashmir when they attacked a convoy. Some eyewitnesses claim that the soldiers took one of them into custody but killed him later. BSF spokesperson rejected those claims saying that the militants attacked the convoy and that they recovered several guns and weapons from those killed. Four soldiers were injured in the incident.

• Naxal terrorists blew up a truck in Chhattisgarh carrying opponents of the Naxal movement killing 26 people and injuring 40 others. Locals have been protesting and blocking Naxal activists as they stop progress and development of backward areas. In many areas, villagers had attacked and killed Naxals making it impossible to flourish. This attack is seen as the terrorists’ plan to frighten the population into not opposing their movement. The police have mounted a massive manhunt along the Chhattisgarh and Andhra Pradesh heavily forested border where the terrorists normally hide.

• In a last ditch attempt, US Secretary of State Condoleezza Rice called Prime Minister (PM) Manmohan Singh to try work out a last minute compromise to salvage the Indo-US civilian nuclear deal. She was trying to get the PM to nudge the negotiators to make a compromise. 

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