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Mainstream, VOL 61 No 5, January 21 & January 28, 2023

Promise and Pitfalls of Budget Analysis | Bharat Dogra

Saturday 21 January 2023, by Bharat Dogra


As India gets ready for the much debated annual budget of the union government (which will be presented on February 1), this may be a good time to consider some aspects of budget analysis.

It is of course very clear that budget analysis can be a very useful exercise as the mass of statistics and information contained in the budget can be examined in terms of what is most important for people and to what extent the needs and priorities of ordinary people have been fulfilled, with special emphasis on the needs and priorities of the weaker and more vulnerable sections.

Such analysis can be also very useful from several other perspectives such as gender, childhood, rural development and environment protection. From the basic budget document one may get a figure for various rural development schemes but these figures may not mean much to many people by themselves. However budget analysis brings together various rural development schemes which may be spread over several ministries, compares the current allocations with previous allocations and actual spending as well with actual needs based on several indicators. With this additional information provided by budget analysis, the budget figures become much more meaningful and people understand their implications.

People also find it very useful to know whether the original allocations were cut or increased later, and what was the extent of fund utilization.

While the importance of such analysis and understanding is quite obvious, we must also be aware of some pitfalls. Let us imagine a situation where allocation for agriculture increases suddenly in a significant way, but this allocation is highly biased in favor of corporate led, ecologically disruptive growth and against small farmer led, ecologically protective growth. In such a situation we cannot say that the increased allocation means the betterment of farmers. Instead we need to voice the high risks and adverse impacts of such a pattern of agricultural development. Clearly in such cases we need to look at not just the amount of allocation but also the several details of the pattern of allocation and spending. When the government may be facilitating the increasing corporate control over farming, among other ways also by promoting GM crops, we cannot praise government farm policy just because allocations for agriculture have increased.

The need for increasing the budget allocations for education and health in India has been repeatedly emphasized, and there is no doubt that this is badly needed. However at the same time we should note that in these two sectors the need for avoiding high profiteering is the most acute and yet at the same time big profiteers are increasingly dominating both these sectors. So it is possible that certain increases in budget allocations may just be gobbled by these profiteers with very few genuine benefits reaching ordinary people and weaker sections. Hence it is important to look in more detail at how exactly any increased allocations are being used.

A particularly important aspect is to know the extent to which the poorest sections of society are benefited in sustainable ways by various budget allocations. In particular it is very important to know to what extent and in what ways budgetary allocations are likely to benefit landless farm workers in villages and informal sector workers in cities.

However in order to provide such detailed and relevant budget analysis, access to detailed information at the right time is needed. To give an example, access to information regarding budgetary cuts at the time when revised estimates are prepared is very important, but generally in a credible way such information becomes available to people much after the cuts have been made when it has limited usefulness. Hence there is clearly need for the government to be much more transparent in such matters.

A very large number of people listen to the budget speech and to the news coverage which follows immediately on TV channels, which in turn is much influenced by the budget speech. Therefore there is a clear need for the budget speech to include many more important facts about the budget instead of concerning itself too much with a justification for government policies and praise for government initiatives.

While there is definite scope for budget analysis to make a much more important contribution to people’s understanding as well as policy, at the same time the fact remains that a lot of budget analysis is based on protecting the interests of important and influential elite groups and hence may be reflecting such concerns and not those of ordinary people and weaker sections. Hence special efforts should be made to ensure that budget analysis based on concerns of weaker sections as well as other priorities such as environment protection can have a stronger base and a wider reach.

(Author: Bharat Dogra is Honorary Convener, Campaign to Save Earth now. His recent books include Planet in Peril, Man over Machine and A Day in 2071)

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