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

Budget 2015–16Subscribe to Budget 2015–16

Long on Announcements, Short on Intent

The first full-year budget of the National Democratic Alliance government announced a sharp focus on investment, growth and social security. In addition, Budget 2015-16 claims to have given a boost to cooperative federalism. The budget indeed makes numerous impressive-sounding announcements, but stumbles in the details. This article focuses on the attention-grabbing push for investments and finds that the target of Rs 70,000 crore investment may be over-ambitious. As far as devolution of funds to states is concerned, the recommendations of the Fourteenth Finance Commission have been diluted and the states may find themselves short-changed.

Corporate Capitalism in the Name of Social Security

The many schemes that have been announced in the name of social security are limited in scope and the quantum of security they prefer. The promotional schemes will also be linked to the market and will benefit the insurance companies. In the meanwhile, basic social security programmes are either ignored or provided limited funding

Finance Commission's Recommendations and Restructured Fiscal Space

Since it is neither feasible nor desirable to reduce central grants to the states equivalent to the increase in tax devolution, the award of the Fourteenth Finance Commission is certainly not revenue neutral for the union government. But the larger question is not of arithmetic but of a shift in policy towards greater fiscal autonomy to the states by ensuring more than 70% of the fund flow through the Finance Commission route and also preserving the fiscal space for the union for its own functions. It is about getting expenditure priorities right at each level of government.

Corporate Taxes and Exemptions

In the Budget Speech the finance minister announced a phased reduction in the rate of corporate tax alongside a removal of exemptions. What is likely to be the differential impact on large and small companies, those reporting large profi ts and those recording small profits? Will this be an opportunity to address concerns which make firms seek exemptions? That apart, Budget 2015-16 has announced a bunch of more incentives and concessions.

Gold Monetisation Scheme for India

Currently India is the largest consumer and importer of gold in the world. Monetising the gold within the country is, therefore, important for macroeconomic stability, and requires a credible scheme for valuing, storing, and tracking the metal.
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