ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles By Mala Lalvani

Macroeconomic Challenges and the Social Sector

The article first sets the context and highlights the macroeconomic challenges confronting the economy. Then it takes a close look at expenditure allocations within the six-pillar framework outlined by the fi nance minister in the 2021–22 budget. It concludes by noting that more could have certainly been done on the inclusion front and on addressing the demand compression in the economy.

Critical Importance of Cooperative Federalism

In addition to the three-pillar framework suggested by the Fifteenth Finance Commission, we suggest four constituents, namely the finance commission, NITI Aayog, goods and services tax, and de facto decentralisation, which will help strengthen the “cooperative” element—a key factor for Indian federation to work effectively. Further, the article focuses on finance commissions empowering the local governments and, in particular, assesses the Fifteenth Finance Commission’s thrust to empower the local bodies.

 

Budget 2021–22

In the context of the pandemic, we evaluate budget 2021–22 and its six-pillar framework. We found lack of clarity as regards allocations under each of the pillars, and hence we undertook to group ministry-wise allocations under each of the pillars. This categorisation was even more liberal than the one that the finance minister herself spelt out. Despite that, we find that the budget fell short of what was required for problems facing the Indian economy.

 

Determinants of Electoral Outcomes

The constituency-level electoral data of 10 parliamentary elections in India, from 1980 to 2014, is used to explore the factors that determine the outcome of parliamentary elections in India. The authors have employed logistic regressions to estimate a vote function with political variables, such as incumbency, political alignment, and political party affiliation, as determinants. That incumbency reduces the chances of winning in close elections, and/or that incumbency disadvantage has been strong in the Hindi belt since the elections of 1998, especially in the states with lower real per capita income, higher share of rural population and low literacy rates are among the various interesting findings that emerge.

Incongruence between Announcements and Allocations

A scrutiny of the Indian economy and the state of public finances reveals that while there are a few areas of improvement under the current government, the economy remains fragile and, worryingly, the situation has worsened in some other respects. It was hoped that the Union Budget 2018–19 would take measures to address some of these concerns but these expectations have been belied. Budget 2018–19, possibly with an eye on elections, has made grand announcements instead of taking hard decisions and making adequate allocations towards key sectors of the economy.

An Examination of Revenue Generation

The revenue side of the budget is scrutinised to understand if the government is being realistic about revenue generation in 2017–18. Clearly, there is over-optimism, given that economic growth will be slow. Too much is expected from voluntary disclosure and penalties, while incentives are not in place. It would make sense to allow some slippage in the deficit targets in order to revive the economy. In addition, the increasing problem of cesses is discussed with reference to the Krishi Kalyan Cess to assess whether cesses serve the purpose for which they are introduced.

Lacking in Substance

Budget 2016-17 was presented after the Economic Survey recognised weaknesses in the Indian economy and raised hopes that the government would usher in major changes to enthuse the private sector to invest and grow once again. The dire situation of the rural sector was sought to be addressed through measures to alleviate suffering. Indeed, the slew of announcements sound impressive but, in reality, are quite modest.