Holding down inflation and interest rates, energising the production function, pushing investments, saving livelihoods, and raising incomes and consumption became the principal objectives of the Budget. The waiver of farm loans is a means to the accomplishment of these goals. G. Ramachandran First things ought to come first. There is an exaggerated view that the waiver of farm loans is senseless and indefensible. The waiver has been criticised on the grounds that it would vitiate the credit culture and exacerbate moral hazard in banking. The critics have no such views when commercial and industrial loans remain unpaid or are waived and written off. The waiver of farm loans is a wholly sensible and defensible decision. The waiver at its worst estimate is expected to cost the exchequer a big sum of Rs 60,000 crore. But it will most likely trigger an increase in gross domestic product (GDP) of over Rs 3,72,000 crore over the next three years. The exchequer will earn at least Rs 44,000 crore if the tax-to-GDP ratio is 12 per cent. The nominal net loss could at worst be Rs 16,000 crore. But there may be no loss at all. The loss could turn into a sizeable profit. There are three reasons for this optimism. First, the loss to the exchequer would be lower when the other robust stimuli to growth act upon the economy. Second, the waiver would break the logjam in the fallow farmlands. It will put crops back on cultivable lands that have remained fallow. A spurt in output will kill inflation. Third, lower inflation will keep interest rates low. Nonperforming assets of banks will rebound smartly. Therefore, law-abiding taxpayers and conscientious borrowers that repay loans have nothing to fear. Smartly managerial The Finance Minister has acquired a reputation for smart and conscientious fiscal management since 2006. He has managed India's fat fixed costs of running government pragmatically. He has outrun the beastly costs by taking a managerial view of tax revenues. He has stimulated tax inflows by lowering the unit excise duty rates. He has raised the threshold of the service tax. The raising of the personal tax threshold level and the slabs expands incomes that can be allocated to consumption. It expands the size of the indirect tax market as a result. Yet, it ensures that the good times of ordinary people will continue. The cut in excise duties applicable to many consumption goods and consumer durables deserves special attention. Compliant and conscientious The boost to consumption may appear scandalous. But the Finance Minister has stayed steadfastly on course to meet the requirements of the Fiscal Responsibility and Budget Management Act (FRBMA). Ernst & Young, a global accounting confirm, has aptly commented that India has