Pranab, Prince of Serendip
India is in surprisingly good fiscal shape despite populist spending, venal politics and misgovernance.
In ordinary English, a budget lays down what you earn and spend. A government budget determines how much money each department gets, with a clear understanding that nothing more will be given save in exceptional circumstances.
This year’s Budget sets a new benchmark in allocations that defy credibility. In one area after another, spending in 20011-12 is budgeted to be less or only marginally more than actual spending in 2010-11.
The food subsidy is to remain virtually unchanged at around .60,000 crore, although procurement prices have gone up and carrying costs for the huge government food stock are high. Something as innocent sounding as “other non-Plan expenditure” is to be slashed from .1,45,884 crore to .1,28,859 crore. Pranab Mukherjee claims in his Budget speech that social spending will rise 17%.
Optimists may think Mukherjee is going to be the toughest finance minister in history, wielding a fearsome budgetary axe. Cynics like me see this Budget as simply the preface to the real spending figures that will show up in supplementary demands for grants in autumn.