Fading Significance Or Healthy Evolution?
The Finapolis|February 2018

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

One of the key functions of the budget is to control prices. The role of controlling inflation in any economy can’t be overstated. However, with advent of globalisation, complexities in an economy have risen. This has resulted in less control of the budget on price rise. Though broad contours of price control is defined in the budget through controlling demand-supply function of various goods, most of the fine prints of controlling prices now require a dynamic approach. These decisions can’t be one time, static decisions and has to be taken on frequent basis with evolving situations. Also, price control lever has also been transferred to RBI to a great extent through its monetary policy pronouncements. Moreover, budget is no longer the only event for pronouncement of fiscal policies as seen in the market borrowing plans of the government.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM THE FINAPOLISView All

Marriage Of Conviction And Not Marriage Of Convenience

Correction phases should be converted into opportunities; most of the frontline stocks would be available at discount and one should look for bargain buying

3 mins read
The Finapolis
March 2018

Brace For More Correction In Equities

While our macroeconomic story might no longer be as strong as it used to be one year ago, the microeconomic fundamentals are growing stronger

4 mins read
The Finapolis
March 2018

Babu-Neta-Bizman Nexus a Bane for Banking

Nirav Modi, Mehul Choksi, Vijay Mallya, Vikram Kothari and the list is getting longer. The cases against corporates, especially those involving bank frauds, are increasingly tumbling out of closed chests

6 mins read
The Finapolis
March 2018

Walk Away From The NPS

Unfavourable tax treatment of NPS as compared to other comparable products like PPF and ELSS, makes this fi nancial instrument unattractive for investors

3 mins read
The Finapolis
February 2018

Stock Technicals

Our analysts pore over technical charts to offer some smart trading tips for the next few months

6 mins read
The Finapolis
February 2018

Sinking Sundarbans: Inexplicable Lack Of Global Concern

Some islands in Sundarbans, an archipelago of 102 islands, have already sunk into the sea and the others, which are thickly populated, are rapidly losing land

3 mins read
The Finapolis
February 2018

Making Investments Work Harder

Albert Einstein has called compound interest the eighth wonder of the world.

3 mins read
The Finapolis
February 2018

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

5 mins read
The Finapolis
February 2018

Bearish On Crypto-Currencies, Bullish On Blockchain Technology

Indian Government will explore leveraging Blockchain technology to promote Cybersecurity due to its ability to support decentralized applications (DAPPS)

4 mins read
The Finapolis
February 2018

Mutual Funds Sahi Hai Despite Capital Gains Tax

Despite long-term capital gains tax (LTCG) on mutual funds, they still remain a good bet for investors as a diversified portfolio can easily offset the tax outgo

4 mins read
The Finapolis
February 2018
RELATED STORIES

US GOVT TO PROBE ZOOM'S $14.7B FIVE9 DEAL FOR NATSEC RISKS

A U.S. government committee that reviews foreign investment in telecom is probing video conferencing company Zoom’s $14.7 billion deal for cloud call center company Five9.

2 mins read
AppleMagazine
September 24, 2021

THE GAME CHANGER

INSIDE DHD’S RECORD-SETTING DURAMAX

2 mins read
Diesel World
November 2021

WANNABE COWBOYS RIDE THE CONTINENTAL DIVIDE

It was our first visit to the U.S. While indulging in stale airline snacks in cattle class on our way to Texas from South Africa, we had a good laugh about all the contradicting and varied opinions of the U.S. we’d heard.

8 mins read
Adventure Motorcycle (ADVMoto)
September - October 2021

WATCHOS 8: SMALL CHANGES ADD UP TO BIG APPLE WATCH IMPROVEMENTS

NEW AND REDESIGNED APPS MAKE THE WATCH EXPERIENCE SMARTER AND MORE REFINED.

3 mins read
Macworld
October 2021

Pet Besties

Meet the winners of our first America’s Best Pet Pals contest. Warm fuzzies guaranteed!

10+ mins read
Reader's Digest US
October 2021

NUCLEAR SUBMARINE DEAL WILL RESHAPE INDO-PACIFIC RELATIONS

The U.S., Britain and Australia have announced they’re forming a new security alliance that will help equip Australia with nuclear-powered submarines. The alliance will see a reshaping of relations in the Indo-Pacific region and beyond. Here’s what it might mean for various players:

3 mins read
Techlife News
Techlife News #516

COURT REJECTS LAWSUIT AGAINST NSA ON “STATE SECRETS” GROUNDS

A divided federal appeals court has upheld the dismissal of an ACLU lawsuit challenging a portion of the National Security Agency’s warrantless surveillance of Americans’ international email and phone communications.

2 mins read
Techlife News
Techlife News #516

3 FORMER US OFFICIALS CHARGED IN UAE HACKING SCHEME

Three former U.S. intelligence and military officials have admitted providing sophisticated computer hacking technology to the United Arab Emirates and agreed to pay nearly $1.7 million to resolve criminal charges in an agreement that the Justice Department described as the first of its kind.

3 mins read
Techlife News
Techlife News #516

GENERAL PROMISES US ‘SURGE' AGAINST FOREIGN CYBERATTACKS

The general who leads U.S. efforts to thwart foreign-based cyberattacks, and punish those responsible, says he’s mounting a “surge” to fight incursions that have debilitated government agencies and companies responsible for critical infrastructure.

2 mins read
AppleMagazine
September 17, 2021

Room to Improve

Hotels take steps to prioritize diversity in the industry.

8 mins read
Global Traveler
September 2021