President George W Bush's major educational programme in his first term was called 'No Child Left Behind.' In a similar vein, Mr Chidambaram's good Budget accurately reflected the pulls and pressures present in the government coalition.

It made the needed ritualistic genuflection to all the sacred cows in the UPA's barn, every commission known to woman, and even the hitherto despised proposal to use foreign exchange reserves to finance infrastructure.

By the end though, it revealed its true colours in a dash for growth. Accordingly, the main question is whether it is likely to sustain the growth momentum that has been building (even as the world economy cools).

Also, in doing so, whether it strikes the right balance between the expenditure populism of the National Advisory Council and the fiscal conservatism of the finance ministry itself.

My initial judgment is that this balance was well struck by the minister, who stressed that rapid growth was the mandate of the National Common Minimum Programme (NCMP) and an essential prerequisite of the social policies that he is being called upon to fund.

Indeed, rapid growth is also essential for the sustainability of the fragile fiscal balance that currently prevails, reflected in the projected stability of the revenue deficit at 2.7 per cent of GDP between this and next year.

Both the Prime Minister and the finance minister had been signalling that an important growth driver would be tax reform. This diagnosis is surely correct, as are the various supporting judgments articulated in the Budget documents, namely that reform of indirect taxes should be broadly revenue-neutral, with revenue growth coming from direct taxes.

In turn, the reform of direct taxes placed emphasis on a rationalisation of exemptions and maintenance of relatively modest marginal tax rates: a clear rejection of the Left's demand to "soak the rich", and much closer to the judgment of some analysts that moderate rates foster compliance.

On the indirect tax side, the endorsement of the move towards state-level value-added taxes is by now somewhat shop-soiled; if this time it happens, it will presumably be because this government is less in the thrall of the traders' lobby than its predecessor.

Despite all its flaws and weaknesses, the state-level VAT should go some way towards removing the effects of cascading and toward creating a more integrated national market. Also welcome was the Minister's endorsement of the need in time to move to a complete Goods and Service Tax (GST).

The reduction in the peak rate of customs duty from 20% to 15% was no less welcome for being anticipated. To my taste there was no need to adjust rates for intermediates and capital goods downwards; to do so is once again to deliver high rates of effective protection to certain sectors, often in a quite arbitrary way.

Perhaps somewhat disappointing was the absence of any plans to reduce exemptions in the customs duty area: as other commentators have pointed out the presence of these exemptions has a major impact both on the effective customs duty rates as well as on trade facilitation.

The one false note in a professional and elegant revenue and reform package was struck by the proposal to levy a tax on cash withdrawals.

Perhaps this was designed to provide an additional stimulus to India's already buoyant growth in credit cards; it will be at the cost of the immense investment that the commercial banks have made in automatic teller machines (ATMs), which have been predicated in part on the strong tradition of cash payments in India, in common with much of the rest of Asia.

If the broad direction of tax policy had been well signaled, both welcome and unexpected were the various proposals dealing with the financial sector.

Of particular note are the proposals dealing with the Reserve Bank of India [Get Quote] such as the elimination of the Statutory Liquidity Ratio and the Cash Reserve Ratio as well the signal on integrated supervision by the RBI.

The thinking behind these proposals is not wholly clear, but they could be interpreted to imply that the government no longer feels that it is necessary to compel the banking system to hold central government debt, over and above the incentives given by the Basel risk-weights.

By removing the distinction between SLR and other securities such a move could make space in bank balance sheets for other forms of capital market investments including the corporate debt that was also mentioned.

Increased confidence in the ingenuity and potential of the financial system as a growth driver was also reflected in the remarks on the potential of Mumbai as an international financial centre.

This, too, contrasts with the Left's traditional distrust of capital markets as parasitic hotbeds of dishonest speculation. In my own view such development would be difficult to achieve without further capital account liberalisation. This perhaps would follow in due course.

In conclusion, this was a thoughtful budget. The scope of the minister's remarks was substantially limited to items within his own control. This was both designed to shore up his own credibility and seems part of an overall strategy, evident in recent weeks of taking the heat out of policy issues by announcing them when Parliament is out of session.

The positive reference to the achievements of the previous government were perhaps designed to create a basis for bipartisan support for the initiatives proposed. This seems to coincide with a rather cooperative tone adopted by senior economic spokespersons of the BJP in the round of pre-budget appearances in the media.

A risk has been taken with respect to the Fiscal Responsibility an Budget Management Act, and with the growth of public debt. That gamble can only succeed if fast growth is maintained.

So, despite all the pulls and pressures upon him, I think one can reasonably say that the minister and his team produced a coherent Budget in a difficult political environment. That is an achievement to be welcomed.

The author is Director General, NCAER.