February 28, 2015
Abstract: A framework to analyse the 2015 central government budget is presented, in terms of four major questions, namely:
- Did the budget lay out an economic and fiscal roadmap linking long-term objectives and financial commitments?
- Did it address significant tax challenges, in terms of broadening the base (e.g., GST) and simplifying the overall framework (e.g., direct taxation)?
- Did it tackle critical expenditure issues like financing infrastructure and meaningfully shifting from the delivery of subsidies and benefits to direct transfers? and
- Did it adequately accommodate the recommendations of the 14th Finance Commission, i.e., a significant increase in unconditional transfers?
The author believes that the objectives of the first three criteria were met while the fourth remains work in progress.
Keywords: government budget; fiscal policy; taxation; subsidies; revenue