Watch the video (above) of the Budget Seminar on ‘The Union Budget 2019-20: Reforms and Development Perspectives’, co-organised by the Indian Council for Research on International Economic Relations (ICRIER), the Indian Development Foundation (IDF), the National Council of Applied Economic Research (NCAER), the National Institute of Public Finance and Policy (NIPFP) and CPR.
The Union Budget in India remains the bellwether of where the government is headed with its economic policies. The 2019-20 Union Budget is particularly important since it suggests how the new government is looking at the next five years. But much of the immediate commentary and eager dialogue on TV and the newspapers takes a narrow, short-term view.
As a counter, the executive directors of five of India’s leading economic policy research institutes came together in March 2007 for the first time to present their assessment of the longer term reform and development implications of the Budget. As we have done for the past 12 years, these five institutions again came together in 2019 to present their more reflective assessment of the Union Budget 2019-20.
As might be expected from a government starting its term and a new Finance Minister, the 2019-20 Budget presented on July 5 has generated much interest. The slowing of the economy and the need to kick-start the investment cycle sits uneasy with the promise of fiscal consolidation and poor monetary transmission. Other trade-offs reflected in the Union Budget include domestic compulsions such as ‘Make in India’ versus international engagement, bank recapitalisation vs. the need for public investment, structural reforms vs. handling short-term exigencies and the political imperatives of the three upcoming state elections. In the budget she has presented, the Finance Minister has tried to balance these and other needs, but her task remains an envious one.
Against this backdrop, the heads of the five institutes shared a reflective view of the Union Budget and its longer-term implications for the Indian economy under the leadership of the Modi-led NDA Government, now decisively in its second term.