Q: When you sit in judgement of this budget on Monday evening, what are the two-three things you will watch given which if those come through you will say this was a bold budget and was in line with my high expectations?

A: Firstly, I would expect him to talk about the fiscal deficit, which is very large and unsustainable at the moment and I look forward to his setting out a roadmap in this budget about how he proposes to go about this.

The second thing that I would like to look forward to in this budget is a spate of economic reforms because we have had a drought of reforms over the last five years or so and if the economic survey is any indication — if even a part of what it suggests is attempted in the budget, it will be a large dose of economic reforms. So, this will be the second thing that I will expect from the finance minister: that he will set out a roadmap of economic reforms, which will be able to take the economy forward. Everyone is saying it should be a revival budget because growth rates are down.

One could look forward to packages, an overall package that he might think of in terms of stimulating the economy. The second is he might go for sectoral packages to attend to specific problems of specific sectors. That will be a very important thing. He will have to raise allocations on what they consider to be socially useful schemes like NREGS et cetera.

Therefore, as I see it, there will be pressure on him to reorder expenditure in the government and to get the wherewithal to be able to finance that expenditure. So, I look forward to his balancing the budget in some manner of speaking at the end of the budget speech.

Q: How could he do that because significant tax increases are very unlikely in this budget? The environment is not conducive for that. Do you think he will think of something out of the box like a voluntary disclosure of income scheme (VDIS) or an amnesty scheme, which can suddenly mop up a lot of money that can be used for infrastructure? Can you think of avenues that are out of the box for raising revenues?

A: Certainly not the ones that you mentioned. Our experience with such out of the box thinking, the last time was that it led to a dip in taxes. In ’97-’98 the VDIS while it netted some money for the government led to a decline in tax receipts. So, it is the same amount of money that you put in this compartment or that.

I am not particularly enamored by any voluntary disclosure schemes because it puts a premium on dishonesty. So, therefore in the five budgets that I presented, I never looked at it myself, never considered it even by a long shot. So, I don’t think that is an option that is worthwhile.

I would say that, he could perhaps roll back some of the deeper cuts in indirect taxes, which had preceded this budget and give more concessions on the direct taxes side especially personal tax, which will put more money in the pockets of people to spend. I look forward to some very liberal dose of tax concessions on individual dwellings.