NEW DELHI: It is not yet clear whether the central government Will accept T.N. Seshan’s view to postpone, presentation of the 199596 budget till March 11, but if it does, disastrous consequences for the economy may follow.
A Union budget is not merely an account of the government’s estimated revenue and expenditure. It Is both a major economy policy statement and an instrument. The budget will indicate whether the government intends to push ahead with fiscal consolidation or give way to populism for political expediency. In poor countries fiscal Stabilization is endangered when the ruling party is though Prime Minister Narasimha Rao has been asserting that the poll debacle will not affect the reforms the 1995-96 budget will demonstrate if this is really so. Current political trends indicate a vote-on-account budget may be presented ever after March 11 by which time, counting in the state elections will be over.
Alternatively, the government may present a “soft budget” which even the Opposition will find difficult to oppose. But his would give a wrong signal to the business community at home and abroad. spurinflation and start fight of capital. Significantly, capital inflows have already come to a halt, but money has not started flowing out as yet. Perhaps, the postponement of the budget could prove to be the proverbial last straw. how to recover deleted files from virtual machine
The Indian economy today is of course far stronger than it was in 1991. The foreign exchange reserves stand at over $1.9 billion, industrial growth is picking up. and record buffer stocks of food grains exist. This time the country could have consolidated these gains and liberalized imports to ward off pressure on the exchange rate of the rupee. There will have to be reforms in the financial sector in tune with the policy to integrate the economy with the rest of the world. And above all, fiscal discipline has to be strictly maintained. recover an indesign file
A vote-on-account budget will give contrary signals regarding all these policy issues.
Article extracted from this publication >> January 20, 1995
