Budget 101

The domain of economic policy-making is more often than not unintelligible to the lay person. It should,of course,not be that way given that most economic policies have an impact on the average persons daily life. At the very least,an effort must be made by the government to reach out to the interested lay person. Finance Minister Pranab Mukherjee has taken one step towards that end by releasing a Budget Manual that outlines and explains the various components of the governments singlemost important,annual,economic policy exercise. Interestingly,it is the annual budget that is shrouded in more mystery than most policy exercises of the government,something the finance minister admitted while releasing the manual.

The mystery that shrouds the budget exercise is peculiar because the budget isnt a matter of national security,the usual motive for keeping things behind wraps in government. Two decades after trade liberalisation and industrial deregulation,it isnt even about revealing the governments decisions on quotas and tariffs which could potentially benefit some parties more than others. Even the tax regime is now stable and less prone to sudden change. Still,the budget is important because it is a statement of the governments revenues and expenditures and ordinary citizens have a right to intelligible interpretation,something the newly released manual should facilitate.

This is important because it will only increase transparency in policy-making. In recent times,finance ministers have held wide-ranging pre-budget consultations with different stakeholders: industry and economists for example. Perhaps it is time to also arrange open consultations with interested aam citizens,who will now be better versed with the budget exercise after reading the Budget Manual.