Today's interim budget was a fine moment for India's democracy. The government could have used the excuse of the global emergency to push through politically expedient policies. Instead, it stuck to the rule book and presented a simple vote on account. This is in sync with Manmohan Singh's insistence on keeping important appointments such as ambassadorships in abeyance till the next government is sworn in.
The TV channels were not swayed by the display of propriety. They, as always on budget day, were focussed on one simple question: would the market rise or fall? Since it fell, they drew the conclusion that the Finance Minister had messed up. 'Damp Squib Budget' was the headline on CNBC-TV18. The clamour of presenters faulting the government for providing no 'big bang' proposals drowned out sensible voices like Deepak Parekh, Nandan Nilekani and Uday Kotak.
Stocks in real estate companies were among the hardest hit, after their chiefs were denied the 'sops' (a favourite word of Indian journalists) they had lobbied for. I'm particularly glad about that. For years these people charged extortionately for accommodation, pricing most of the population out of the market and encouraging a speculative bubble. Their net profit margins were outrageous, over 50% in the case of big companies like DLF, Unitech and HDIL; and that's without factoring in the black money involved in most transactions. Yet, the promoters of some of these firms were so greedy in leveraging their gains that, once the price bubble burst, they found themselves on the brink of insolvency. Imagine that: a company makes a profit of hundreds of crores of rupees one quarter (these are not fictitious profits like Satyam's), and a couple of months later is almost bankrupt.
What's their response to the crisis? Instead of lowering prices to push sales volumes, they hoard their stock, waiting for the market to turn, all the while complaining the government isn't offering enough tax incentives to buyers. In fact, the buyers are out there. When MHADA offered 3800 reasonably priced flats in January, it received 430,000 applicants for the ballot, more than a hundred per apartment, a sign of how desperate people in Bombay are for a decent place to live. But the likes of DHL, Unitech and HDIL aren't interested in those five lakh citizens, or the many millions like them across India.
On the business channels, anchors looked at the market's falling graph, shook their heads and said, "Unfortunately, Pranab Mukherjee merely did what the constitution stipulates". So there you have it: 300 points on the Sensex on one side, and the nation's constitution on the other. Which is more important? The broadcasters have made their choice.