When Nirmala Sitharaman announced her new privatisation policy, there were serious doubts if the move had the BJP's full political backing. All those doubts were dispelled when her initiatives were endorsed by Modi in Parliament, observes A K Bhattacharya.
'The finance ministry's decision to accept the deficit target of 4.5 per cent in 2025-2026 appears to have emanated from its endorsement of the Finance Commission's view that the Indian economy will continue to remain impacted by the pandemic, adversely undermining its growth potential,' notes A K Bhattacharya.
But it is disappointing to note that Sitharaman's third Union Budget continues to promote a few problematic ideas, observes A K Bhattacharya.
Do the actual numbers bear out the claims made by the government or do they suggest something else? asks A K Bhattacharya.
If eight states could join the VAT system much after the rollout date and after seeing how it works, why can't the same apply to states opposed to the farm laws, asks A K Bhattacharya.
If Nirmala Sitharaman does indeed present a 'never-before' like Budget on February 1, going by her promise, she would create a new benchmark for post-contraction Budgets, observes A K Bhattacharya.
'But can it afford to present a scenario within the existing legal framework of fiscal consolidation?', asks A K Bhattacharya.
Can the finance minister manage our expectations, asks A K Bhattacharya.
Clearly, the extra borrowing of Rs 4.2 trillion the government has planned so far will not be enough to meet the shortfall in revenues which could be between Rs 8 trillion and Rs 10 trillion, points out A K Bhattacharya.
IThe fiscal deficit target for 2020-2021 was originally set at 3.5 per cent of GDP. But the government's revenues have collapsed and its expenditure burden will only increase over the Budget estimates.' With the government having already planned for an additional borrowing of over Rs 4 trillion, the fiscal deficit for the current year would be much higher than the Budget estimate, notes A K Bhattacharya.
The oil sector has been quite lucky for the Modi government. It has often provided an opportunity to the government to mend its finances, notes A K Bhattacharya.
'There can be no dispute over the adverse impact such a policy will surely have on India's manufacturing competitiveness,' notes A K Bhattacharya.
The question on who should borrow from the market and whether the borrowing will be under two buckets should be decided by the GST Council, and not by the Centre. If there is no consensus, there has to be a vote, says A K Bhattacharya.
Pranab Mukherjee's stewardship of the economy will stand out as much for the manner in which he managed controversies as for creating quite a few of them, says A K Bhattacharya.
'It may be prudent not to plunge into a new online tax appeals system in one go, which could only create more disputes and increase the embarrassingly high tax arrears of the government,' warns A K Bhattacharya.
Far more important than governance is to ensure how different states get necessary representation a'The pressure to expand the council of ministers will come from states where the BJP has formed a government after ousting the Congress,' predicts A K Bhattacharya.
'An explanation perhaps lies in the culture of revisions that has grown deep roots in the government data collection system,' notes A K Bhattacharya.
'The road ahead for the government's fiscal management will be full of many new challenges,' warns A K Bhattacharya.
It is time the government cast its net wide for seeking expert advice on managing the Indian economy and formed a group to help it navigate the difficult days ahead, advises A K Bhattacharya.
Every time the Indian economy has faced headwinds due to international developments, the oil sector has played a crucial role, explains A K Bhattacharya.
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