New Delhi, Feb. 27: Palaniappan Chidambaram is as comfortable in a Canali suit as a crisp white veshti he loves to wear to Parliament. When he unveils his fifth budget tomorrow, this ability to balance seeming contrasts will again be visible.
With elections to four key states round the corner and more to follow, the ruling coalition and its Left allies want the budget to be peppered with populist measures. His party bosses want a feel-good budget the common man can relate to.
By all accounts, Chidambaram will oblige. He has already promised gender budgeting (to show how much of the funds are going to women) and has expressed concern for senior citizens ' and itís more or less clear these sections will gain from the budget.
Corporate India will also get some relief from the much-reviled fringe benefit tax as he takes some business-related expenses out of its ambit.
Chidambaram has been an ardent proponent of reforms but he may just hold off on some of the controversial steps.
Some big-ticket reforms were greenlighted by the cabinet weeks before the budget: key airports have been privatised, multinationals have been permitted to enter the retail segment with single-brand entities, and state-owned banks have been permitted to farm out lending and financing activities in the rural areas to NGOs and other entities.
Besides tinkering with taxes, the budget may push some soft reforms. The much-feared exempt-exempt-tax (EET) regime, which taxes savings when they are withdrawn, may kick in but its impact could be cushioned by tax breaks for savings in pensions and mutual funds.
Prime Minister Manmohan Singh has said that duties ' both customs and excise ' will be cut to near Asean levels to make industry more competitive.
Paring duties means initial revenue losses and Chidambaram will certainly try to offset it by reducing tax exemptions available to industry and individuals.
The finance minister is under strict instructions to take care of the Congress goals of guaranteed employment for the poor and creation of rural infrastructure under the Bharat Nirman programmes.
Another pressing area for large-scale spending, which the common man identifies with, is infrastructure. Roads, ports, rail and power networks are overloaded and in need of an estimated investment of Rs 6,000 to Rs 7,000 crore every year and Chidambaram is likely to deliver on that.