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The focus of the Union Budget 2022-23 presented to Parliament on February 1 is to facilitate “the process of strong growth”. Accordingly, the Budget “seeks to lay the foundation and give a blueprint to steer the economy over the ‘Amrit Kaal’ of the next 25 years – from India at 75 to India at 100”.In this context, the three-fold vision which the budget has enumerated is: (a) Complementing the macro-economic level growth focus with a micro-economic level all-inclusive welfare focus;(b) Promoting digital economy & fintech, technology-enabled development, energy transition, and climate action;(c) Relying on a virtuous cycle starting from private investment with public capital investment helping to crowd-in private investment.The Budget has mentioned that ‘Amrit Kaal’ is futuristic and inclusive and to give impetus to growth with four clear priorities viz;(a) PM Gati Shakti(b) Inclusive development(c) Productivity enhancement & investment, sunrise opportunities, energy transition and climate action(d) Financing of investments.It is pertinent to note that the vision and the priorities cited in the Budget are mostly in a longer-term perspective. We wonder how this could be addressed in the Budget 2022-23 which has been under a rule based fiscal policy (limits on borrowing by the government) since July 05, 2004. It is important therefore, to delve into the extent to which budgetary expenditure could be enhanced to move the economy to higher growth, given the limitations to raise revenues.Accordingly, let us study the fiscal management of the government which is the core function of a Budget.
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Budget lacks direction of a longer-term perspective on managing growth, inflation and fiscal consolidation
