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Indian budget is not a secret now
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Indian budget is not a secret now

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  • 1. IndianBudgetis not a secret now
  • 2. Once considered as a top secret affair, thebudget related matters has initiated an openapproach with domesticaudience and has now gone global
  • 3. Finance minister pledgesthe fiscal deficit to reduce it 5.3% of GDP and cut it further to 4.8% in 2013-14
  • 4. Open Budget approach has succeededCredit rating agencies is no longer threat With right action planChidambaram restoredIndia’s global credibility
  • 5. Investment analysts have upgraded their expectations for India Billions of dollars have flowedin, strengthening the rupee and thus helping tame inflation This has enabled the RBI to cutinterest rates, further improving the investment climate.
  • 6. Earlier Budgets constantlytinkered with tax rates on this or that item People with advanceknowledge could make moneybuying or selling items before the tax rate changed, so secrecy was deemed paramount.
  • 7. In the bad old days, the budget speech would first specify proposed government spending, notably theincrease in annual Plan spending
  • 8. It would then specifyexpected revenue, andsay this left too large agap to be filled entirely by deficit financing (which meant printing money).
  • 9. So, the Finance Minister would say, I am raising taxes on the followingitems — and a long list would follow, often hundreds of items.
  • 10. He sometimes cut tax rates, typically before an election.Such tinkering made it possible to profit from budget leaks, sothere was total budget secrecy
  • 11. The US hasalways had an open budgeting system
  • 12. First the President announceshis budget proposals, then the House of Representativesproduces its own version, and the Senate produces a third version.
  • 13. These three sets of budget proposals are thendebated, with the public joining in, and finally a compromise budget is hammered out
  • 14. Such openness is a virtue in any democracy. It also means that the budget debate is not on endless tinkering, but on broad tax and spending philosophies
  • 15. US budgets look atspending and revenue over years, even decades
  • 16. In the Indian earlier days of blind self-sufficiency, there was no sense of India’s place in the world
  • 17. But after the reforms of 1991, India has become muchmore globalised, with the ratio of imports and exports to GDPrising from 15 per cent to 45 per cent
  • 18. As India is far more prosperous, alsomeans that the budget calls to address a global audience, not just an Indian one
  • 19. Thank You