How Is Budget Prepared


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How Is Budget Prepared

  1. 2. CII Proposals BUDGET NCAER Economic Survey NASSCOM proposals BUDGET
  2. 3. ECONOMIC SURVEY <ul><li>What is the Economic Survey all about ? </li></ul><ul><li>It is a survey, which is released just prior to the Budget and collates information from all sectors of the economy. </li></ul><ul><li>The Economic Survey has reviews of the economy as a whole. </li></ul><ul><li>It aims to give a summary of the economy's performance in the year gone by, with a view to enabling the formulation of a growth-oriented Budget. </li></ul><ul><li>The survey reveals the effectiveness of the previous year's Budget and gives an opportunity to the Government and its economic advisors to plan for the year ahead. </li></ul>
  3. 4. Highlights of Economic Survey 2005-06 <ul><li>Economic growth projected at 8.1 per cent in 2005-06. </li></ul><ul><li>Agriculture growth at 2.3 per cent. </li></ul><ul><li>Foodgrains output up by 5 million tonnes to 209. </li></ul><ul><li>Inflation rate projected at 5% in current fiscal. </li></ul><ul><li>In medium-term, inflation likely to fall. </li></ul><ul><li>Interest rates may harden. </li></ul><ul><li>Savings rate up at 29.1 per cent of GDP. </li></ul><ul><li>Investment rate up at 31 per cent of GDP. </li></ul><ul><li>Industrial growth at 7.8 per cent (April-December). </li></ul><ul><li>Fiscal and revenue deficit targets to be met. </li></ul>
  4. 5. Highlights contd…. <ul><li>Tele-density increases to 11.32 per cent. </li></ul><ul><li>Trade deficit increases. </li></ul><ul><li>Bold policy reforms in oil sector required. </li></ul><ul><li>Policy required for speedy development of infrastructure. </li></ul><ul><li>Indian industry needs to be unburdened from high taxes. </li></ul><ul><li>Forex reserve down by $2 billion to $139.2 billion (till Jan'06). </li></ul>
  5. 6. What is Fiscal Deficit? <ul><li>Fiscal deficit = total expenditure –(Revenue receipts + recovery of loan + other receipts) </li></ul><ul><li>Primary deficit = fiscal deficit – interest payment </li></ul><ul><li>Revenue deficit = revenue expenditure – revenue receipts </li></ul>
  6. 7. Fiscal Indicators:Centre and States Combined <ul><li>Figures are in % of GDP </li></ul>3% 0 % Year FD RD PD RD/FD DEBT INTEREST PAYMENT 1990-91 9.4 4.2 5.0 44.6 64.9 4.4 1995-96 6.5 3.2 1.6 48.8 61.3 5.0 2004-05 7.5 3.7 1.4 48.9 82.5 6.2 2005-06 7.5 3.1 1.6 41.5 79.5 5.8 2006-07 6.5 2.2 0.8 33.6 78.6 5.7
  7. 8. <ul><li>Is fiscal deficit Good or Bad? </li></ul><ul><li>Is it a good idea to reduces Fiscal Deficits Through Disinvestment? </li></ul><ul><li>Does increased government expenditure necessarily lead to a greater fiscal deficit? </li></ul>
  8. 9. Key Research Areas of NCAER. Assessment of policies relating to taxes and subsidies, administered prices, exchange rate, capital flows, monetary policy and public spending in a framework that quantifies the impact of these factors on the aggregate output and price is made available through commissioned studies, periodic reports and seminars. 1. Growth, Trade and Economic Management
  9. 10. 2. Investment Climate, Physical and Economic Infrastructure Council has produced a number of important studies and reports on India's infrastructure including topics such as domestic fuel use, use of non-conventional energy, regulatory framework for electricity generation and supply, telecommunication and transportation. Core Themes: -Policy issues in industry and infrastructure - Sectoral studies to evaluate competitiveness and growth prospects -Tracking Consumer expenditure  
  10. 11. 3. Agriculture, Rural Development and Resource Management - Reforms in the agricultural sector and agreement on agriculture (AoA) under the WTO -Price policy and public distribution system (PDS) -Land consolidation, fragmentation and optimal land-use plans -Rural infrastructure and agro-processing -Irrigation and watershed management -Changing food baskets and their impact on production patterns
  11. 12. 4. Household Behaviour, Poverty, Human Development, Informality and Gender -Evaluation of poverty and employment - focus on informal sector employment -Sectoral studies in population and demographic transition -Morbidity and health economics -Economics of education -Gender studies
  12. 13. Proposals for the budget 2007-08 <ul><li>The percentage share of agriculture in the total GDP in India is declining at a continuous rate. This sector constitutes a larger employed sector in the country. The need of the hour is to undertake quick steps to provide productive employments and self-employments in other sectors. </li></ul><ul><li>More investments on education and skill formation: Investment on the formation of Social Overhead Capital in India is necessary for achieving global expertise and competitiveness. There should be more investments in education and skill formation. </li></ul><ul><li>More emphasis is to be given for achieving FRBM targets. </li></ul>
  13. 14. Proposals for the budget 2007-08 <ul><li>It proposes for a single goods and services tax in the coming budget 2007-08. </li></ul><ul><li>Generation of employment and self-employment in the non-farming sectors. </li></ul><ul><li>The poverty rate in the country must be reduced by creating income earning sources for the people. </li></ul><ul><li>Developing elementary and secondary education in the country. </li></ul><ul><li>Budget 2007-08 should aim at the growth of Indian Economy, which is led by the level of consumption in the country. </li></ul>
  14. 15. THANK THEM………….