A Do-Or-Die Budget

The indian economy is suffering a massive crisis of confidence. Budget 2020 needs to be more than an income-expenditure statement—it must spell out how the government intends to kickstart the economy

- Shwweta Punj, M.g. Arun And Anilesh S. Mahajan

What is the recipe for a great budget? Generally speaking, the answer depends on who you ask. Economists have a hawk-eye for the numbers—are they credible, do they add up—while industrialists are often more concerned with what a budget does for their respective sectors. In India, Union budgets are typically more than just accounting exercises, and the more memorable ones have contained a vision statement, a roadmap for the economy.

These include Manmohan Singh’s famed economic liberalisation effort in 1991—which opened the Indian economy to the world, enabling the growth of domestic enterprise— and Morarji Desai’s 1968 budget, which reduced the administrative burden on excise departments by introducing a ‘self-assessment’ system for manufacturers. In 1973, Y.B. Chavan nationalised coal mines, altering coal production in India, and reduced the marginal tax rate from 97.5 per cent to 77 per cent. Yashwant Sinha, as finance minister from 1998-2002, opened up the telecom sector and deregulated the petroleum industry, while P. Chidambaram’s 1997 budget established institutional and regulatory frameworks for the expanding economy.

In the first term of the Prime Minister Narendra Modi-led NDA government, the budgets presented by finance minister Arun Jaitley aimed for a Digital India, powered by smart cities. Alongside, a slew of social development-oriented schemes—the Pradhan Mantri Ujjwala Yojana, direct benefit transfers and the Swachh Bharat Abhiyan—attempted to change the average Indian’s access to housing and toilets, electricity, gas cylinders and healthcare. And in July last year, after the BJP-led NDA returned to power, Union finance minister Nirmala Sitharaman’s budget set what looked like an ambitious—yet achievable—target: to grow the Indian economy from around $2.75 trillion in 2018-19 to $5 trillion in 2024.