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Some singers do not charge fees these days after completing a song in Bollywood. It is not out of a sense of philanthropy; but the knowledge that the real earnings are not from the one-off fee, instead, from the money spinning stage performances that are to follow, as music makes a strong comeback in the new Bollywood. Like a lost diamond, the Hindi movie song has been lying in a film of dust since the late nineties, its glitter fading every year. But it is beginning to shine again.

After a decline in sales that began 12 years ago, Indian music is beginning to look up with a return of good lyrics, great music, better promotion, renewed listener interest and bigger margins.

For the first time, the music industry is propping itself up again, supported by digital music rather. International movie and music companies are coming to Bollywood, and are set to bring with them a mirage that has eluded composers and writers for long: royalties.

But at the heart of it, there was no number crunching or marketing jugglery; it was pure craft. “Women call me about the song and weep on the phone,” said Prasoon Joshi, referring to his eloquent song Maa in Aamir Khan’s Taarey Zameen Par. The craft of the song is changing. A new set of young writers, composers and technicians is giving music a new sound, face and feel.

“I have not worked with a single director above 42 years. Most are in their 30s, even late 20s. Most technicians are young. Forty-five is the upper limit,” said Vishal Dadlani, of the composer duo Vishal-Shekhar, who did the music for Om Shanti Om.

“It is a shift of generation. The average age in the business will soon be 25. I think its fantastic-it accurately reflects the mindset of the future,” Dadlani said. “Even songwriting structures have entirely changed.”

The traditional mukhda –plus two-antaras structure (opening and two verses) of tile song is no longer sacrosanct. The influence of rap music brought in broken, jagged, often conversational verses. Sometimes the mukhda is done away with. And there is a fair amount of English on occasions.

This is an industry where most songs have long been composed the inverse way - the music directors created melodies, directors approved them, then they were given to lyric writers along with a brief of the story and song situation, and then the song was written to suit the metre and the context.

But that, too, is changing. Several music directors, including A.R. Rehman, Shankar-Ehsan-Loy, Vishal-Shekhar and Sandesh Shandilya often compose lyrics given to them. The young composers are also giving Bollywood a new beat.

“Melody has taken off its clothes, it wants to wear something new,” said Sajid Khan of the music duo of brothers Sajid and Wajed. “Bombay is glittering like gold. Its talent is being flashed all over the world.” Many of these people, including the lead singers, are much younger than the icons of the past generations.

“The younger brigade is led by Sonu (Nigam), Shaan, KK, Sunidhi (Chauhan), Shreya (Ghoshal),” said Dadlani. “I think it does give it certain vibrancy. They are open to experimentation and do new things all the time. People now come to you and say they want to work with new voices and lyricists.”.

All that is part of a huge arc of efforts that is reviving Bollywood music. The Indian music industry has been in a slump as the rest of the world: pirated music is believed to be one-third of the organised market. Also, with sales of cassettes and CDs going down - in 1994, a top selling album sold 3.8 million copies, but in 2006, it sold 2.6 million. Unlike in most other developed markets, music is dominated by films in India.

But things are looking up. The music industry, valued at Rs 1,000 crore in 2000, was estimated at Rs 650 crore in 2006. Digital music is going to prop it further, taking it to a projected Rs 750 crore in another two years, according to a study done for the Confederation of Indian Industry (CII).

“Many writers are trying to say something new, find a new language to write,” said lyricist Swanand Kirkire, whose first song Baawra Mann in the 2005 Hazaron Khwahishen Aisi still resonates with listeners. “For the first time, I see that a normal Indian is finding his voice. Money and recognition is better. People know who has written a song,” Kirkire said. But he added: “The new Bollywood is not flawless, it is not complete yet.”

Many of the flaws have to do with what lies at the heart of it all: in the world’s most watched movie industry. Where music fetches millions, composers and lyric writers do not get royalties due to them.

Some of that is changing already. International companies are stepping in with the promise of starting a royalties system in India. Vishal-Shekhar are producing albums by other artistes and will give royalties.

At a larger level, many say the movers and shakers in Bollywood do not understand or respect good writing. Joshi said: “Respect for writing, not for writers, is needed”.

The Centre is planning to fund the farm loan waiver package over the next 24 months and at least 25% of the total Rs 60,000 crore package will be met through government borrowings.

The waiver package will be a part of the supplementary budget that will be presented later this week. Finance minister P Chidambaram has said he will tell Parliament how the government would compensate banks for the losses incurred on account of the farm loan waiver worth Rs 60,000 crore.

There is enough headroom for the government to raise Rs 15,000 crore: a source said. The government expects a higher revenue collection by the dose of the current financial year. The size of the expenditure budget of the government is more than Rs 7lakh crore.

Sources in finance ministry have hinted that the both tax and non-tax revenues and even proceeds from disinvestment may be some of the options for funding the scheme. State governments will also have a share of the burden. The finance ministry is at present finalising the modalities of the scheme. The RBI has already sought details of NPAs and overdue from all banks by March 14. The scheme will be rolled out before July 2008.

Sources said that the advances from the Rabi season in July 2006 amounted to Rs 48,000 crore. With 75% of the total advances being repaid, the government expects at least Rs 12,000 crore to be in the form of an overdue. A short term crop loan becomes overdue within a six month cycle. Other kinds of loans have a longer repayment period. Over Rs 20,000 crore worth of loans were rescheduled in 2004 due top a natural calamity.

Another 10,000 crore is on account of outstanding from the Vidarbha package when loans where restructured and rescheduled in 2006. Under the Vidarbha package, loans were rescheduled in 2006, interest payments were waived off. Till April 2008, no repayment was required, and repayment would be due over the next three years. Interestingly, since these rescheduled loan accounts are standard assets as on February 29, 2008, they become eligible for the onetime settlement scheme which is being offered to large fanners, a banker said.

Of the Rs 60,000 crore, co-operative banks account for over Rs 35,000 crore, scheduled commercial banks and their RRBs account for another Rs 20,000 crore.

Under the scheme, marginal fanners holding up to 1 hectare and small fanners holding up to 2 hectares, are eligible for a complete waiver of all loans that were overdue on December 31, 2007, and which remained unpaid until February 29, 2008. Other farmers are eligible for a one time settlement (OTS) scheme for all loans that were overdue on December 31, 2007, and which remained unpaid until February 29, 2008. Under OT5, a rebate of 25% will be given on payment of 75% of the loan.

The government has said that the fiscal deficit target for 2007 -08 will be met. As against a budgeted estimate of 3.3%, the government expects to dose the year at 3.1 %. After presenting the Union Budget, finance minister P Chidambaram had said that it gives him enough headroom.

Is reining in fiscal deficit critical for the macro economic health of the nation? The issue is almost akin to that of a family spending more than it earns, month after month, and year after year. Perhaps the only difference is that the fiscal profligacy of the government does not necessarily result in bankruptcy. Governments can simply print money to support their overspending. However, nations have now become aware that printing money to meet deficits invariably lead to massive inflation. Therefore, governments issue bonds to bridge the fiscal gap. But the entry of a giant-sized borrower into the debt market, leads to three negative fall-outs.

First, the interest rate in the market place begins to spike. And this directly hurts investment and capital formation. It also deters those who borrow from banks to purchase white goods, automobiles, or even seek student loans. Second, equally important is what economists’ call “crowding out private investments”. The very same rupee which could have earned much higher returns in the hands of a private entrepreneur, ends up offering low returns, if at all any, in the hands of the government.

Third, evidence suggests that much of the extra spending of the government goes into financing salaries, interests, and subsidies. These further lead to pressure on prices and breed inefficiencies. With rising global food prices, rising global oil prices, and rising prices of almost all commodities induding iron ore, copper and aluminum, it is critical to guard against fuelling price rise due to the impact of fiscal deficit.

In order to restrain the government from fiscal profligacy, the Fiscal Responsibility and Budget Management Act (FRBM) was passed in 2003. This Act required that the fiscal deficit be brought down to 3% of GDP by 2008-09. Fortuitously, we are nearing this target already.

However, the target for revenue deficit the excess outlay on government’s day-today operational expenses - is slipping. We were to reach zero revenue deficits by the year 2008-09, as per the PRBM Act. But, we will still be at 1.54% by the end of this fiscal. In other words, zero revenue deficit, unfortunately, is still eluding us.

What are we to make of this control over fiscal deficit on the one hand, and inability to rein in revenue deficit, on the other?

There-is something seriously amiss. What is getting squeezed in the bargain is capital expenditure for infrastructure - physical and social. In fact, such productive expenditure has fallen from 3% of GDP in 2002-03 to 1.81 % in 2006-07. During this fiscal, we may see a slight improvement, though the fears continue to lurk on this account.

Unfortunately, the picture on the subsidy front is not comforting. The quantum of subsidies have risen from Rs 43,533 crore in 2002-03 to Rs 53,463 crore in 2006-07.

What is more troubling is the fact that in addition to these ‘explicit subsidies’, there is a massive hidden subsidy, euphemistically called ‘implicit subsidy’.

These extra budgetary transactions in the form of bonds issued to oil companies’ fertilizer companies and the Food Corporation of India amounted to 1 % of our GDP in2006-07.

The bonds issued to oil companies alone amounted to Rs 24,100 crore in 2006-07 and those to Food Corporation amounted to Rs 16,200 crore. Neither of these two large expenditures appears in the ‘Budget at a Glance’. We believe that this year, the government has envisaged an ‘implicit subsidy’ of Rs 30,900 crore for the oil and fertilizer sectors.

In conclusion, fiscal deficit must remain under control and FM deserves kudos on this account. But, in this budget he must rein in the revenue deficit, bring back the focus on capital formation and address ‘implicit subsidies’ head-on.