Opinion

Budgets without bluster

Updated on: Feb 17, 2014

It’s time to separate policymaking and the Budget process

This is my 25th Budget and I can count on my fingers the number of times the regular, 21-gun-salute ‘Budget’, complete with all the theatrics, was replaced by the quiet, workmanlike Vote-on-Account. And every time this happens, the same feeling resurfaces: Wouldn’t it be great if all Budgets were like this?

An Interim Budget, by necessity, strips away most of the dramatics, the political posturings, and above all, the major policy tinkerings which have become part and parcel of the Budget exercise over the past many years. A Vote-on-Account Budget, in essence, is what all Budgets should be — a simple statement of incomes and expenditures, and an orderly allocation of the revenue kitty towards various requirements.

All other business is and should be the legitimate business of government — but not as part of the Budget exercise. But Budgets have grown into monstrous things. They decide whether egg whisks and umbrellas will cost more or less. They decide whether the country will get realistically nearer building its own battle tank. They changed stock markets, altered interest rates, created and destroyed industries with the stroke of a tax man’s pen. It’s ridiculous.

India’s first Budget, presented on November 26, 1947, by Finance Minister RK Shanmukham Chetty — an interim Budget, incidentally — simply stated the income and outgo. Chetty explained the reasons for the deficit (war, refugees), levied a tax on cotton yarn, and carried on.

It all changed with with TT Krishnamachari’s 1957 Budget, when the big policy decisions started getting introduced. TTK sharply raised import controls, hiked income taxes, slashed allocations to ‘non core’ areas, brought in wealth tax, hiked peak rate of excise to 400 per cent, and generally went about doing some wholesale social engineering, something his successors are still doing. It’s time they stopped.

Associate Editor

Published on March 12, 2018

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