A Budget for ‘Shubhkruta'

The Budget must combine elements of ‘new and novel’ with the ‘tried and tested’, both incremental and disruptive, to usher in the year of light

- CYRIL SHROFF

RADICAL UNCERTAINTY MAKES DECISION-MAKING REQUIRE NEW PARADIGMS, where data, probabilistic analysis, and similar tools provide limited support, say, Mervyn King, former Governor of the Bank of England, and John Kay in their book Radical Uncertainty: Decisionmaking for an unknowable future. India’s Finance Minister faces an unenviable task in the Union Budget to transition us past uncertainties ranging from Omicron, supply chain disruptions, interest rate normalisation and possible taper tantrums, inflationary pressures, climate change, as well as the opportunities of “blessings of unicorns”, the 4 Ds of democracy, demography, demand, and data, plus digital public infrastructure and the flood of international ESG capital to build back better and create the “next normal”.

A humble wish list that integrates “new and novel” with “tried and tested”:

• A unified Indian financial code: Like the unified “Securities Code” announced in last year’s Budget, a single unified financial code is needed for the Reserve Bank of India Act, Banking Regulation Act, Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980, Payment and Settlement Systems Act, etc. This will not be a measure of consolidation, but instead an opportunity to embed regulatory governance best practices in the statutes. RBI undertook an exercise to set up a Regulatory Review Authority 2.0 (RRA2.0). The Indian Financial Code along with RRA 2.0 could introduce measures such as undertaking regular cost-benefit analysis and public consultation ex-ante; regulatory impact assessment and amendments and recalibration