Fading Significance Or Healthy Evolution?

External factors now play a larger role in achieving the budgetary estimates than ever before. This has raised questions over the relevance of budget in today’s globalized world

- Debasis Mohapatra

Budget is a key annual event in the national calendar. From pre-independence era, this annual event has not only been responsible for creating a blueprint for resource allocation for a year, but has also been an important instrument of nation building. From legislations on taxation measures to new policy pronouncements, budget usually covers every aspect of national importance. However, with the advent of globalisation, the interaction of Indian economy with global markets has grown manifold. This in turn has made economic policy interventions more frequent and dynamic to take care of the ever changing fi- nancial landscape. As one time pronouncements in the annual budget becomes less relevant as the year progresses, the government has to manoeuver in several ways in order to manage the emerging event. Against this backdrop, the glory of the budget is slowly fading with falling expectations of the public at large.

“While the general budget is the key to provide a direction to the overall economy, we should also evaluate how much of the budgeted targets are dependent on external factors like crude oil prices or exports. In that sense, we have a whole process of budget making which comes up with scores of budgetary targets, achievement of which is dependent on factors which are not under our control,” D Ravishankar, Founder Director of Brickwork Ratings India, said.

He, however, noted that fiscal discipline and overall direction of the economy were outlined in the general budget and there would be no substitute for budgetary process.

Blurry objectives