Budget 2017-18: Social spending Jayati Ghosh

The Modi government over the past three years has not been noted for its generosity towards the social sector and spending to meet goals of improving human development. Indeed, if the past were any guide, there would be little reason to expect much increase in social sector budgetary outlays on the part of the central government. However, this year, for various reasons, analysts were led to expect that there would be at least some change from the fiscal disdain the government has shown in the past to this area. After all, the failed demonetisation has severely dented living standards of…

In the 2017 Budget, the Government has Compounded its Folly Prabhat Patnaik

The Budget estimates, which have generally become somewhat suspect of late, are particularly meaningless in the case of the 2017-18 Budget for two obvious reasons: first, the early presentation of the Budget means the availability of that much less information for the current year, upon which the Budget is based; and second, the draconian demonetisation that has occurred, while certain to pull down the GDP growth rate (even the Economic Survey concedes that), makes any precise prediction impossible. Let us therefore look at the broad strategy of the Budget rather going into its numbers in any detail. One obvious thing that…

A Disappointingly Ordinary Budget for Extraordinary Times Jayati Ghosh

The most striking thing about Arun Jaitley’s budget presentation for 2017-18 is just how unstriking it is. A lot of was expected from this Budget, and it is largely the Government’s own fault that the expectations were so many and so contradictory. In the event, the Finance Minister has presented a very “ordinary” Budget, which is unlikely to satisfy most people who recognise that these are definitely not “ordinary” economic times. First, this Budget comes directly in the wake of demonetisation followed by painfully slow and inadequate remonetisation, which has dealt a body blow to the informal sector as well…

Budget 2017 must Support those Worst Hit by Demonetisation Jayati Ghosh

How to mitigate and reverse the adverse impact of the demonetisation ought to be at the top of the Finance Minister’s agenda for the coming Budget. The effects of the ill-considered and even more poorly implemented scheme are still being felt across the country, in the form of reduced economic activity, job losses and reductions in income and consumption. Since remonetisation is still incomplete – and the government has already threatened not to replace the full value of the demonetised currency in a coercive push to digitisation – the impact on economic activity from that one source alone will continue…

Will We Miss the Budget Opportunity? Jayati Ghosh

This year’s Budget would never have been easy to present, with the economic uncertainty swirling around the globe and the demonetisation-induced domestic downturn still ongoing in the Indian economy. But the Modi government seems to be determined to make its own task harder. It has managed to generate expectations that will almost inevitably be unfulfilled, through a weird combination of denial of the manifold ill-effects of demonetisation, encouragement of all sorts of ideas around the universal basic income, and simultaneous acceptance of relatively rigid fiscal targets. But consider first the very timing of the Budget announcement, in the context of…