NEW DELHI: India's Finance Minister Pranab Mukherjee on Sunday defended the government's "zero-risk" budget, conceding he was in a tight political spot and could not afford to take bold economic reform steps.
Mukherjee, known as the government's trouble-shooter, steered clear of contentious economic reforms in last Friday's budget and fixed a higher than expected fiscal deficit target that avoided tough public spending cuts.
"I had to be extra careful," Mukherjee said following a string of graft scandals and recent bruising state election losses that have put the Congress government on the back foot in parliament and frayed its relations with allies.
"I could have introduced measures that would have left everybody clapping, but the clapping would have been short-lived," the veteran 77-year-old politician told Indian business leaders at a post-budget forum in New Delhi.
"I had to keep in mind the conditions on the ground in formulating policies that the budget would have to be approved by parliament."
Mukherjee presented against a backdrop of political infighting over a proposed rail fare hike to upgrade the notoriously unsafe network that has underlined the increasingly fragile nature of the coalition.
The budget forecast economic growth for the fiscal year to March 2013 of 7.6 percent, a rise from the 6.9 percent projected for this year, but far below the eight-to nine-percent levels the economy grew at for much of the last decade.
It set a fiscal deficit target in 2012/13 of 5.1 percent of gross domestic product (GDP) -- less that the projected 5.9 percent this year -- but still the widest among major emerging market nations.
But Mukherjee faced strong criticism from industry leaders who said he failed to seize his last opportunity to get the economy back on track before what is expected to be a "please-all budget" next year ahead of 2014 elections.
"What may be good in the short run may be bad in the long run," R.V. Kanoria, president of the Federation of Indian Chambers of Commerce and Industry, told Sunday's forum.
Indian media has also attacked the budget with the Mail Today calling it a "zero risk budget" that is "low on vision."
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