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A big leap forward

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

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