EQUITABLE GROWTH MUST BE THE FULCRUM OF GOVERNMENT BUDGETS

GOVERNMENTS have an obligation to use taxpayer money responsibly. Budget making requires a strategic and comprehensive approach. Policymakers must invite consultations, gather input on budget priorities and allocate funds accordingly. Most state budgets do not.

- Vikas Singh

Citizens have a bigger role (than they own up to) in influencing budget priorities. They must participate, advocate, organise and mobilise society to raise issues and build momentum. They unfortunately don’t, are despondent and look to others.

Civil society and the Press too must shoulder the responsibility and engage with key stakeholders to communicate with and question the government.

The Central government’s budget hogs the limelight. It attracts disproportionate attention, even obsession. State policies and budgets that trigger and catalyse economic activities and growth drivers are often ignored. Growth and its dynamics are bottom-up. The policies at the state level attract investment, ‘Ease of doing business’ drives consumption, creates infrastructure and impacts most other growth drivers.

In a less developed economy the government must prioritise social spending and invest in multipliers such as health, education and rural development. But equally, it must invest for the future, in hard assets and strategic infrastructure that promote growth. Roads, bridges, transit, water, power, rail network, etc. are the essential building blocks of the economy. They enable trade, power businesses. Poorer states, particularly in the north and east need holistic and radical reforms. At the same time they need to build capacity to match and march with other more developed states. 

Lazy Policymaking: However, the trend is to focus on nonmerit subsidies and misdirected welfare spending. Such spending constitutes over three fourths of what some states ‘earn’. Misdirected and non-merit subsidies benefit only the endowed. It shows up as lopsided development.