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

Budget 2010Subscribe to Budget 2010

Union Budget for 2010-11 and the UPA's Growth Strategy

The growth strategy underlying Budget 2010 intensifies a recent tendency wherein private consumption expenditure has increasingly substituted for public expenditure in order to induce growth. It also accepts a regressive bias in fiscal policy as part of the strategy. In the Union Budget, the government has restructured the tax system so as to curtail revenue expenditures, while maintaining past direct tax concessions and using a part of its revenues to provide new concessions that are expected to spur demand, sustain and increase corporate savings and encourage corporate investment, all with the intention of "facilitating" growth. The potentially "inequalising" fallout of such an approach is possibly seen as collateral damage in realising a high rate of market-driven (as opposed to state-driven) growth, which needs to be redressed separately - if at all it will be.

Assessing the Fiscal Capacity of Indian Governments

This article assesses the record of different post-reform governments in meeting their fiscal targets and improving both delivery and finances. A variety of indices are constructed, and consistency checks devised to measure relative performance. No government has achieved its targets, but the Congress Party has had the best record in keeping its promises, and reducing deficits. The effect of the growth dividend on lowering government debt and deficits is established. But the failure of the government finances to improve proportionately with this suggests the need for further improvement in expenditure management.

Analysing the Parikh Committee Report on Pricing of Petroleum Products

The Parikh Committee's recommendations on pricing of petroleum products are bad for the country and worse for the aam aadmi. The committee's recommendations do not address the problems of petroleum pricing in their entirety and appear to be driven by the desire to give private sector refiners, originally set up for export of products, an entry into the domestic market under the garb of liberalising price of petrol and diesel. The petroleum sector in India needs tax rationalisation and not tax increases. The high incidence of taxes on the petroleum sector, relative to the gross domestic product, has a negative impact on issues such as access to energy services and development.

Neither Vision Nor Policy for Education

Going by the reduced non-plan expenditure for higher education institutions, increased emphasis on interest subsidy on educational loans, a steep cut in the allocation for the National Means-cum-Merit Scholarship scheme, and reliance on public-private partnership modes for setting up of model schools in the Union Budget, it may not be wrong to infer that the State intends to continue reducing its role in funding education and relying on the private sector.

What Does Budget 2010 Imply for the Social Sector?

The Union Budget for 2010-11 does pay some attention to a few important areas in the social sector like women and child development, development of minorities, rural housing and technical education, but the budget's overall allocations and proposals for the critical social services fall far short of expectations and are in keeping with the fiscal conservatism that has gripped the United Progressive Alliance government in its second tenure.
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