Stepping back in time as reforms go into reverse

So it's perhaps not surprising that the budget Mukherjee delivered yesterday wouldn't have seemed out of place in those bad, old socialist days.

If Indian prime minister Manmohan Singh's 1991 budget was the moment India embraced market liberalisation, yesterday's budget was when the Left reasserted itself.

The Congress party's resounding election victory in May allowed it to jettison its Communist
party supporters. Many hoped that this would allow it to pursue a second term of bold reforms, privatisation, and the opening up of India's economy to foreign investment.

They couldn't have been more wrong. Instead, Congress took the victory as evidence that throwing cash at the rural poor, rather than financial reform, is the way to win elections. Mukherjee massively ramped up rural social spending, sending the fiscal deficit through the roof.

But if you really want proof of the heavy socialist leanings in India's ruling party, it's the line that brought Mukherjee the most applause. 

"Never before," he said, "has Indira Gandhi's bold decision to nationalise our banking system exactly 40 years ago appeared as wise and visionary as it has over the past few months."

If you're looking for free-market reforms, you should perhaps look elsewhere.

When Shri A Raja became telecoms minister for a second term in June, it was bad news for Vodafone. Manmohan Singh had even tried to block him from the post, so heinous had Raja's reputation become over the past few years. But when last week his political rivals accused him of being the unnamed Union Minister a High Court judge said had pressured him to change his decision in a court case, there was a chance he may have to step down. Vodafone can only hope the allegation sticks.

The Bandra Worli Sea Link, Bombay's handsome new cable-stay bridge, didn't take long to become just another focal point for expat scorn. At busy times last week, it took an hour to cross, rather than the promised seven minutes. "It has the dubious honour of being the only bypass I've ever been on that is slower than going via the original obstruction," grumbled one Brit.