An ‘Early’ Budget Is a Bad Idea, Writes Sitaram Yechury

Rajya Sabha MP Sitaram Yechury on the implications of advancing the Annual Budget.

CPI(M) leader and Rajya Sabha MP Sitaram Yechury. (Photo: PTI)

An 'Early' Budget is a bad idea.

Advancing the annual Budget has the following implications immediately apparent:

1. The advance GDP estimates for the ongoing FY were released in February, and meant actual data for three quarters was considered. Now, with the advance estimates being released in January, actual data for only first two quarters (so only till September 2016) will be considered. This is bound to present a wrong and misleading picture of India's GDP growth rate, which is bound to be revised downwards heavily later on.

Not only will it hurt the credibility of the government, and India, consequently, but it will also make the people who are experiencing economic hardships, lose faith in such numbers being shown that appear hyped and evidently rosier than the truth.

2. The Economic Survey presented before the Budget was meant to cover the preceding year and form the basis for policy interpretations, decisions and discussions on the Budget.

Now the Survey will cover only half of the preceding year, while the full year will be covered by the mid-year review in July, well after the Budget. Will there be a mid-course budgetary correction if the July review shows something different?

3. Budget-making is a serious exercise which should be done based on maximum possible available data. This will not be possible by advancing it to January, and is bound to lead to "looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies".

4. As we see it, this is a short-term political move done with an eye on UP and Punjab elections so that the BJP government can announce enough sops while bypassing the model code of conduct.

We expect the Election Commission and the Hon'ble President to take note and reverse this decision.

(This article first appeared as a Facebook post written by CPI(M) leader and Rajya Sabha MP Sitaram Yechury.)