All budgets are in a sense compromises with different stakeholders. Whether it is a housewife making budget for home or a Chief Finance officer for a company or Finance minister for the Government. The core issue is that expenditure is always larger than revenues. Government can rely on Nasik press and Corporates on Banks. But housewives have no such recourse.

The Government has significant number of stakeholders like corporate—domestic & foreign—farmers, small entrepreneurs, salaried employees, retirees etc. Satisfying all stakeholders is a herculean task. In our system unfortunately the movement of Sensex is equated to Economic progress even though the share in GDP of all listed companies will not be more than 10 percent. Since in USA the role of corporate is very large it is assumed that similar is the case India by the US educated Economists and Experts.

Interestingly after a long time the focus of this budget is on Agriculture and Rural sector and social sector and infrastructure. One of the important areas is irrigation. It is really sad that even after nearly 70 years of independence only 40 per cent of our cultivated land is irrigated and rest depend on vagaries of rains. This budget suggests that more than 28 lakhs hectares will be brought under irrigation in the next few years. A dedicated long term Irrigation and will be created under NABARD with an initial corpus of Rs 20000 crore. Equally important is how prudently the funds are going to be used since past experience in Irrigation is not encouraging particularly even in progressive states like Maharashtra. But this time we hope things will be different since the first Constable of treasury [ pradhan Sevak!] is PM. Given the price increase in Pulses and its impact on recently concluded Bihar polls—the Government has allotted Rs 500 crores for Pulse outputs.

Roadways are another area of Focus. Govt has allocated Rs 19000 crore under Roadways schemes. Government has committed to 100% village electrification by May 1,2018—one full year before next election

The philosophy underlying the budget is about water, power and roads. Government rightly thinks that if these three needs are fulfilled then society will take care of other things.

Of course there is an initiative for financing higher education wherein a bank similar to National Housing Finance may come into existence. But the cost of LKG and UKG is equally skyrocketing and perhaps this bank can take care of the needs of all education and skill formation like ITIs.

On the tax front there has not been any major change other than additional benefit of Rs 3000 to those whose taxable income is below Rs 5 Lakhs and an additional benefit of Rs 50000 for loans up to Rs. 35 lakhs & home buyers up to Rs 50 lakhs worth homes.

Another area is tax exemption of commutation of up to 40 per cent in NPS. But for new entrants PPF becomes EET [ exempt/exempt/tax] unlike current EEE. This needs re-think since PPF acts as first pillar of old age security scheme in a country like India where more than 80% do not have any mandated pension benefits since large workforce is self employed.

Two areas which required attention is pertaining to having a separate regulatory framework for Mudra initiative and steps to curb black money generation and holding of it. In his Budget speech on Monday, Arun Jaitley reported that an amount of Rs 1 lakh crore was sanctioned to 2.5 crore borrowers by February 2016 under the PM Mudra scheme and has proposed an increased allocation of Rs 1.80 lakh crore for the same. But for this to succeed there is a need to create a Mudra bank similar to NHB for integrating dispersed credit markets. Similarly by demonetizing Rs 500 and Rs 1000 notes and by making holding of cash beyond say Rs 20 lakhs an offence--- one could have addressed domestic black money.

Most important is that no scheme is named after politicians in power unless the earlier regimes—wherein more than 1000 schemes/universities/roads/airports/hospitals were named after members of Nehru family only. From that point it is a welcome departure.

One can say safely that it is a budget by Modi and he has definitely passed this exam with flying colors—since in his address to children on 28 February he mentioned Budget as his exam.

This budget made D Raja of communist party of India to comment that it has given no benefits to corporate sector. This reaction is interesting and intriguing. His late leader A.B Bardhan caustically commented “Let Market go to dogs”--in 2004 when the first UPA government was to be formed—the government which was presumably run from Alimuddin Street of Kolkata (CPIM) and Gopalapuram of Chennai (DMK).

Either CPI has moved far away from its revolutionary roots or BJP has moved away from its big business/Financial markets obsession. May be both.

(The author is Professor of Finance at IIM Bangalore.)