140 crore citizens, a country as huge as five Afghanistan, five Pakistans, nearly 10 Vietnams and 25 Englands in the area. Speaking of population demographics, a large chunk of the population, 50% to be precise, is below the age of 25, and nearly 66% of the total population is below the age of 35. As per the World Bank, a country with a current GDP of 3.55 lakh crores US Dollars just introduced the budget that will decide the economy’s fate for the year to come and the next few years.
Before we delve deeper into the highlights of the budget, we must understand the importance of budget in our lives. One must look around and see, be it a few retired gentlemen at the local tea stall or that Gen Z, you know, every day scrolling reels in metros; today, one thing that brings everyone on one platform is a dialogue and discussion on the budget. The annual discussion and presentation have always been a significant highlight of the year. Take any newspaper, go to any news channel, scroll your Instagram feed or even just make mention of the economy, and the discussion will be redirected to budget. As much as these discussions should be promoted and welcomed, unfortunately, there is very little to discuss in them. The problem is over the years, the budget being prepared is not prepared to keep the common man in mind. The irony is that the budget speech is still delivered in English, and the focus of opposition lies on the President finding it challenging to address in English. Before you consider me a pro-Hindi activist, the idea is, are we- as a nation, able to disseminate information about policies to those who are their primary beneficiaries? The day a farmer in Begusarai is in a position to understand the budget or the day when the government or the opposition will make extra efforts to solve this problem, we as a nation will be able to know how realistic these policies are.
Coming back to the budget, it is not prepared overnight, but there are a series of discussions, studies, high-level meetings and consultations with various stakeholders before the budget is presented in the parliament. The preparation of the budget begins with a circular being issued by the budget division of the Ministry of Finance in the month of August/September notifying the timeline for submission of the financial estimates of the respective ministries/government bodies for the upcoming fiscal year and the format in which these estimates should be submitted. The next step in this process is calculating the country’s GDP and estimating the growth for the next financial year, followed by pre-budget consultations and meetings. The next step is where the Finance Ministry calculates the financial deficit amongst the ongoing consultations. The amount of money the government borrows to bridge the gap between the government’s earnings and expenditures is also known as a fiscal deficit. India is a developing nation; therefore, the monetary resources spent are usually more significant than the government’s earnings. The constitution has laid out the Fiscal Responsibility and Budget Management Act of 2003, which states that our annual deficits should not exceed 3% of our GDP and overall not exceed 60%. For a better understanding, for every 100 rupees India has, we can borrow three rupees yearly, including the money borrowed in the previous years. Our borrowings cannot go beyond 60 rupees. Currently, we are at 4.4 %, which means that for every 100 rupees we have, we owe nearly 4.4 Rupees.
Once the deficit is calculated and expenditure estimates are turned in, the Finance ministry starts allocating funds to various ministries and bodies based on the vision and strategies of the central government. This is done through a consultation with the prime minister and cabinet ministers by the finance minister. In case of any discrepancies, the finance minister may consult with the prime minister, cabinet and other stakeholders.
Finally comes the final step, which is usually seen in the media. The printing and finalising of the final statement. This starts with organising the ‘Halwa ceremony’ at the finance ministry. This ceremony signifies the beginning of something new and prosperous on a sweet note. The finance minister serves halwa to all the staff members involved directly with the Annual financial statements (Union Budget). Once the ceremony is over, all the employees directly involved with the budget must submit their cellphones, cut off connection with the outside world and stay in the basement of the North block until the Annual financial statements (Union Budget) are printed and read out in the parliament.
As vital as these annual financial statements (union budget) for the nation’s economy, these statements can also disrupt the flow of the economy. If the information mentioned in these statements is leaked before they are presented in the Lok Sabha, the plans and policies of the government could be impacted severely. Therefore, the government must take extraordinary measures to secure this information.
Very few would pay heed to the proceedings of the budget session, and no one is to be blamed. Unfortunately, the session was supposed to be dedicated to serious discussions on the financial statements. Today, it is becoming a victim of showmanship, protests and disruption, and no one side can be blamed for this. Before the budget is presented, The session begins with an address from the President of India to both houses of the parliament in a joint session on 31st January, followed by tabling of the ‘Economic Survey of India’ by the Finance minister. This is a document that the Chief Economic Advisor of India prepares. The document can be considered a summary report with statistics related to the economy and its progress, along with a detailed account of how much revenue was generated, how much money was borrowed and what the government took the policy and initiatives in the previous economic year. Followed by which on the next day, the finance minister of India presents the budget to the parliament.
Of course, after this extensive exercise, a budget is publicly discussed. Now, coming to the most pressing question: is the budget reasonable? Is there something buried in the fine print that we are missing? Is tax rebate a scam? Is Bihar becoming BJP’s favourite state? To answer this, I am not a political expert nor an expert on the Indian economy. Of course, a few areas, like education, youth, employment and ever-mounting debt, need a little more attention. Yet again, we must be fully cognisant that the government, over the years, have gone far and beyond to make education more accessible and advanced. One must also applaud the efforts taken in the direction of making India a cancer-free nation but, at the same time, realise there is very little allocated to research to eradicate cancer. The increase in loan limits allocated for MSMEs sounds excellent. However, the question should be how many such loans get sanctioned by banks and have a 100% disbursement, what the scope of recovery is, and who will be responsible for recovering this amount. Lastly, the tax slabs and reductions are some things that have revamped the image of the Finance Minister, yet again, personally, there is a shortcoming when it comes to breaking it down for the citizens at large.
As I conclude, you may or may not call this a budget great work, but we can’t neglect the efforts put in. Of course, there will always be a scope for improvement, and these changes will only come when we stop talking about the budget from the reel perspective and start talking about it from the real one.