Feb. 28: Palaniappan Chidambaram had looked good at the nets yesterday when he came to the pitch with the India Shining story in the Economic Survey. But today he dropped a sitter.

The stock market howled, driving the sensex down by 540 points after the budget. Usually politically correct, this time corporate India did not hide its “disappointment” — the word industry appeared to have dropped out of the finance minister’s lexicon.

Chidambaram did not hike personal and corporate income tax. He raised the threshold limit of exemption by Rs 10,000 to give a Rs 1,000 relief to all individuals and allowed bigger deduction on medical insurance. The new threshold limit for women will be Rs 1.45 lakh and for senior citizens Rs 1.95 lakh.

He, however, partly punctured the bonus by slapping an additional 1 per cent education cess to fund quotas, among other things. Because of it, the tax burden will go up for those earning above Rs 5.1 lakh a year. And since the cess is on all taxes, prices can go up too, as Maruti has already announced and other car makers are considering.

Immediately after the budget, the indication of prices increasing is a nasty welcome as controlling inflation — running at 6.5 per cent and the election debacle in Punjab and Uttarakhand being blamed on it — is the key objective for the government. The focus of Chidambaram’s budget was on agriculture and the social sector. “It (UPA government) has delivered on the promise of growth, and we will deliver on the promise of making growth more inclusive,” he said.

Some 15 minutes he spent on agriculture, trudging through a daunting array of schemes after kicking off with a quote from Nehru. “Everything else can wait, but not agriculture.”

According to the budget estimates, allocation for education has been increased by 34.2 per cent and for health and family welfare by 21.9 per cent.

A Congress spokesman called it “the party’s and Sonia Gandhi’s budget”. But that could not protect Chidambaram from not only being denied the usual applause from industry, but also some plainspoken criticism.

“No steps have been announced to increase productivity in agriculture, electricity and other sectors which are not producing up to their potential,” said R. Sesashayee, president of the Confederation of Indian Industry.

The rise in dividend distribution tax, expansion of fringe benefit tax to include employee stock option plans (Esops) and introduction of minimum alternate tax for information technology companies spoiled the market mood as the sensex closed below 13,000.

Some market players, however, felt it would be unjust to lay the entire blame on the budget.

“More than the budget, the market was influenced by global trends (world markets were falling),” said Dhiraj Sachdev, of HSBC Asset Management.

Economists like Amaresh Bagchi, a former member of the finance commission, however, were not breaking any sweat over the market response. “The budget is not meant to please the capital market.”

Like him, M. Govinda Rao, director of the National Institute of Public Finance and Policy, was kind to Chidambaram’s offering.

“This budget surely has made efforts to ensure inclusiveness,” he said.

The government’s Marxist allies did not appear impressed. “This is a ritualistic budget. It will have no impact on inflation, allocation to various sectors is nominal,” said CPI leader Gurudas Dasgupta.

Prime Minister Manmohan Singh came to Chidambaram’s rescue. “Education and health care are the primary imperatives,” he said.

Inflation has been causing the biggest turmoil in the Congress and among its allies. The minister cut the peak import duty from 12.5 to 10 per cent. The import duty on edible oil was slashed to zero, to rein in prices.

Chidambaram said additional revenues — the net generation is Rs 3,000 crore — would be used to promote inclusive growth, equity and social justice.

But it appears that to raise this amount, tiny when compared to the total projected tax revenue of over Rs 400,000 crore, the minister has taken the risk of destroying the sentiment, at least on budget day.

“I have not done anything to hurt growth,” Chidambaram said, adding he expected 9 per cent growth next year.

Although economists will debate on growth versus inflation, the talking point in Parliament today were cats and dogs. He cut the import duty on the food they eat, triggering cat calls and loud barks about being partial to animals over “aam aadmi”.

Meow to that! And if you want to know what he could’ve done beyond cats and dogs, read our budget.