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Discussions on Union Budget on Friday 17th July, 2009 at 6pm |
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The Bangalore International Centre (BIC) had organised an interactive discussion on the Union Budget 2009-10 on 17 th July, 2009 at 6 pm. The Panellists were Dr. Vinod Vyasulu, Director, Centre for Budget and Policy Studies, Mr. D Muralidhar, Immediate past President, FKCCI, Mr. S Krishnaswamy, Senior Chartered Accountant and Prof. K Gayithri, Associate Professor, Institute for Social and Economic Change (ISEC). Prof. S L Rao, Chairman, Institute for Social and Economic Change (ISEC) moderated the discussions.
The panellists generally agreed that the Finance Minister had to do considerable tight-rope walking to balance the budget for which popular expectations were high. Mr. Muralidhar was of the opinion that the post-budget crash of sensex did not truly reflect the view the industry which felt that the Finance Minister had done a commendable job to boost up the flagging economy with the proposed public expenditure during the financial year. Prof. Vinod Vyasulu wondered about the justification of the pre-budget hypes, particularly in the context of the fact that budget is after all only one of the instrument of the economic policy of the state, and certainly not the only one. He raised concern about the extent of deficit financing and highlighted the need to increase revenues and reduce unimportant expenditures.
In her observations, Prof. Gayithri highlighted the fact that the fiscal deficit, if one takes into account those of the State Governments as well, would be of a much higher order than 6.8 per cent and raised the issue as to how is this proposed to be financed. She cautioned that increased public spending need not necessarily be either spent or result in increased service delivery. The emphasis, as she said, was more on outlays than outcomes. She also underscored the need to bring about reforms in expenditure planning and management.
Mr. S Krishnaswamy highlighted the fact that the budgetary deficit of Rs.4,00996 crores was unprecedented. This was further compounded by the fact that the amount of annual loan repayment came to Rs.3,42,891 crores. He also pointed out that the amount of revenue deficit (Rs.2,82,735 crores) indicated that the Government was not able to meet its fixed expenditure from taxes and other income. This was also stressed by Prof. S L Rao who underscored the fact that the trend was distinctly against the objectives outlined under the Fiscal Responsibility and Budget Management Act. Prof. Rao also stressed the fact that the time available for implementation of the schemes proposed under the budget would be hardly 7 months and hence the emphasis of the government would continue to be on the achievement of financial targets, rather than physical targets. He advocated adoption of the Rolling Plan pattern to get over this problem.
A stimulating discussion followed and the mood was that of cautious optimism about the coming days. At the end of the day there was a reluctant admission that the Finance Minister had limited options before him and possibly he was only trying to make the best out of a bad situation. |
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