Allowing finance minister to present the budget a month in advance has its merits
When Yashwant Sinha as finance minister broke the 53-year tradition of presenting the Union Budget at 5 pm in 2001— with the full backing of his leader and then prime minister Atal Bihari Vajpayee, he moved the budget timing to 11.30 am — he had two considerations in mind: Bringing to end a British era practice continued by successive Congress governments. Equally or more important was the consideration that stock and currency markets must fully absorb the importance of budget proposals and react on real-time basis. Sinha was perhaps eager to align the budget making process to an open and transparent liberal Indian economy literally.
If budget proposals and market interplay are an accepted policy preposition, why not interlink this annually important economic exercise with political developments of the day? After all, it does not make sense to postpone or stagger the date of the budget presentation just because there are crucial assembly elections in five states. But there is merit in the argument put forward by the six Congress-led opposition parties, who allege that the BJP-led NDA may take advantage of budget presentation to curry favour with the electorate, effectively turning it into its advantage. These parties have argued before president Pranab Mukherjee and Chief Election Commissioner Syed Nasim Ahmad Zaidi that budget presentation be postponed to March 16, a day after counting of votes for five assemblies is done.
Some parties have even petitioned the Supreme Court to restrain the government from presenting the Union Budget on February 1, as announced. The apex court has rightly not interfered with the budget making process.
But the moot point is this: economic policy-making decisions have rarely been taken in isolation from ruling political parties’ agenda and manifesto commitments. Both in the states and at the centre, ruling party coalitions have had held a distinct advantage over the opposition parties campaign. Allowing voters in these states to react on real time basis to budget proposals would mark a departure from enticing the voters with all goodies on the sly by either the ruling or opposition parties.
When demonetisation and surgical strikes are bound to top the discourse in the run up to polling for five legislative assemblies, adding economic content to this articulation seems to be a right thing for all political parties to seriously consider.
In any case, before the election commission’s moral code of conduct kicked in on Wednesday, prime minister Narendra Modi went about either laying foundation stones or commissioning infrastructure projects in the key state, Uttar Pradesh.
Not to be left behind, UP chief minister Akhilesh Yadav unveiled 23 major projects in one day. Similar is the case of Punjab when its Prakash Singh Badal’s government made several populist announcements. With or without budget, ruling political parties always had ways and means to reach out to their constitueuncy.
Breaking away from the past, allowing budget presentation on February 1, must be experimented ahead of assembly elections. In addition, in a country where assembly elections to one state or the other are held every year, deferring economic governance does not augur well for a thriving — not to mention — noisy democracy like ours. Allowing finance minister Arun Jaitley to present the Union Budget one full month in advance therefore, has its merits.
If the three-stage budget process is completed and tax proposals adopted in Parliament by March 31, the actual spending can begin on April 1.
This will give a three-month advantage for government agencies to fully utilise the budget funds. Even making taxation proposals effective from April 1 will lead to a huge advantage for corporates and individual taxpayers.