Proper institutional apparatus can bring rationality in budgetary process

While we take in the interim Budget, this is a good time to think about the larger picture. The budgetary process and fiscal policy in India now face two big problems. The first is the mismeasurement of GDP and potentially its over-estimation. This has important consequences for tax targets and the bond issuance programme. The second is the emergence of population-scale entitlement programmes. These have induced adverse effects upon the political economy worldwide; India will need to build the countervailing forces to check and balance the political imperative.

The interim Budget will be in force for April-June, and then the next