'Of Hits and Misses: Analysis of Union Budget 2018-19' -CBGA
-Centre for Budget and Governance Accountability (CBGA)
Union Budget 2018-19 is the fifth and the final full-year budget of the current ruling dispensation. The major plank on which this government was elected in 2014 with an exceptional mandate were issues of development related to reducing corruption, generating meaningful employment opportunities, tackling inflation (especially food inflation, an issue plaguing the economy at that point of time), reducing inequality, and pushing the economy on a higher growth trajectory. In that context, many would look at this year’s budget from the perspective of how much has been achieved over the term of the government.
At the outset of its term, the government, by adopting the recommendations of the 14th Finance Commission (to increase the states’ share of divisible pool of Central taxes), raised hopes for a strengthened federal fiscal architecture and ‘cooperative federalism’. It was expected by a large section of the stakeholders that such transformative changes in governance and policies would lead to better outcomes both in the macroeconomic and development indicators. However, the two big bang reforms executed by this government, namely ‘demonetisation’ and a hastily implemented GST, have been highly contentious.
The current state of affairs in the economy points towards a number of critical challenges being faced. This has even been acknowledged in the Economic Survey 2017-18. The Survey notes that the economy has undergone a slowdown and faces a challenge of “reviving agriculture and rural development” and “creating jobs for the young and burgeoning workforce, especially for women”.
Given this, the focus of the Union Budget 2018-19 is rightly directed towards several announcements for agriculture and rural infrastructure development, generating employment opportunities in the formal sector, providing quality healthcare for underprivileged and senior citizens and improving the provisions for education. To quote the FM, the budget focuses on “strengthening agriculture and rural economy, provision of good health care to economically less privileged, taking care of senior citizens, infrastructure creation and working with the States to provide more resources for improving the quality of education in the country” and emphasises “generating productive and gainful on-farm and non-farm employment for the farmers and landless families” (Budget Speech, Union Budget, 2018-19).
It is in this context that the report, 'Of Hits and Misses: Analysis of Union Budget 2018-19', presents a comprehensive analysis of the budgetary provisions for important social sectors and the vulnerable sections of the population. It also presents an overview of the fiscal indicators and analyses some of the current issues related to taxation, international financial transparency, implications of GST and budgetary provisions to tackle employment challenges in the economy.
Please click here to read the full report.
Centre for Budget and Governance Accountability (CBGA), 2 February, 2018, http://www.cbgaindia.org/wp-content/uploads/2018/02/Of-Hits-and-Misses-Analysis-of-Union-Budget-2018-19.pdf