Since the economic reforms were launched in 1991, the annual budget of the Union Government has assumed a special aura-as a key signal about the direction of economic policy-or more precisely, as a barometer for liberalization. Earlier budgets presented by Manmohan Singh and P Chidambaram were received with great enthusiasm by business, and succeeding governments have claimed to have broadly pursued the economic reform agenda Yet seven years down the road, there is little evidence that India has entered a phase of high and sustainable growth In fact, the economic trends point in the opposite direction. The main pillars on which the revival of Indian economic growth was to have been founded - industrial production and exports-have revealed their vulnerability. In both the major material production sectors-(industry and agriculture) growth is in the doldrums. Declining and decelerating industries had more than half the share in the manufacturing sector in 1997-98. On the macro-economic front, the fiscal deficit remains as great a threat as ever, having risen. Foreign portfolio investment flows are down sharply, negating gains from the up trend in FDI.