A budget by definition refers to all planned revenue and expenses. Therefore, the foremost purpose of a budget is to forecast and enable a plan to face the forecast. The budget is by principle, the most important document that the government formulates for the purpose of the economy. With the arriving of the economic slowdown, people today are looking forward to the budget like never before. In the history of the previous four governments, I have never seen anything out of the ordinary in these budgets. So I, as a citizen, would ask myself the question – would the government come with something different and effective this time?
Focusing initially on the investment misbalance that has taken place due to the surplus withdrawals by the FIIs and other foreign investors, the real estate market along with the stocks went for a toll. Since we cannot revamp an economy without bringing in these investors again, I think its primary to ease investments, so that they could be made. In government will have to increase its infrastructure budget to a larger extent. Infrastructure has a three hit point benefit to an economy.
First, it generates employment and provides contracts to private contractors and investors. Second, it accelerates development. Three, it accelerates the economic process. Therefore I feel that infrastructure should be of primary concern. The government will have to resist continuing stagnant rural and urban schemes and will have to remove them. In turn what the budget should focus on are on the development of rural banking systems and agricultural networks by which the farmers can get a better price for their produce. It would also be favorable for the government to reduce its research expenditure and make relaxations on research by private parties.
Primarily, the government will have to remove its political interests from the budget and realize that national interest is the best political interest all by itself. The technicality is on understanding what will happen. Maintaining the economy and raising it from the ditch it is almost landing to is of primary concern and any politically attractive scheme can ruin the entire thing. I think development and financial recreation has to be the objective of the budget this summer. Development because, it would act as a growth and recreation catalyst. Financial recreation to conserve and secure finances to create financial security.
Promises are fulfilled when the task is completed, the thousands of crores on paper which was supposed to go on relief has never been dispatched till date. The speed in which the government will solve these problems is never guaranteed, therefore, there is a need for the government to bring a more realistic budget than the usual ones. We need to focus on innovation not just in financial systems but on the agricultural sector as well. The old stagnant relief schemes will not do anymore. Transfer payments, the redistribution of income in the market system will have to activated to clear the burdens created by the real estate market.
The situation we face today is complex and to arise from such a situation is complex too. The government will have to resist its political temptations and create a realistic budget for development.