“Reforms, to be credible, must not only result in higher growth but also benefit all sections of society. Government must therefore, pursue a two-fold strategy: of accelerating growth through an appropriate reform agenda and deploying the surpluses generated through growth to augment social welfare.”
Dr C Rangarajan (The Hindu, October 29, 2015)
There is a felt need for a prudent ‘Asset Liability Management’ (ALM) approach in handling government finances. The ‘Take as it comes’ approach to revenue and ‘Pay as you go’ approach to expenditure which is a legacy of the pre-independence governments need a quick re-visit. Though government finances cannot be compared to accounts of banks or companies, if the arrogance of ownership settles down in the mind as a ‘right to do anything, come what may’, we may not need an astrologer to predict doom. Sooner the government looks at its financial planning with a prudent ALM approach, it would be better for the country.
Our approach to the whole exercise of financial planning and budget need to undergo a change, if our resources mobilisation and deployment of scarce resources have to yield the kind of results in terms of economic growth and ensuring distributive justice. Poverty alleviation (now poverty elimination) has been an avowed objective of Government of India’s financial planning since the 1950’s. Planning and budgeting have a significant role in taking the benefits of economic growth to the needy. As history of several nations has shown, economic development alone cannot sustain long term social security for the people. Government gets an opportunity to make corrections in the financial planning exercise every year, if only there is a will to use annual budget as an instrument for the purpose.
While budget proper deals with receipts and expenditure, the annual budget speech is a document one looks forward to, for the government’s approach to various policy measures affecting the economy and the financial sector in particular.
Though Government has not deviated from the traditional path in formulation of Budget 2016-17, this year’s budget has been formulated after sieving through the suggestions and proposals received by the finance ministry from various sources including the opposition in Parliament and over 7000 suggestions posted online by public @mygov.in  
Finance Minister Arun Jaitley in his Budget Speech on February 29, 2016 outlined the nine pillars on the basis of which he hopes to enhance India's economic growth. From focus on agriculture to tax and financial sector reforms, these are the nine pillars that Jaitley spoke of to transform India: 

1) Agriculture and farmer welfare with an aim to double farmers' income in the next five years 

2) Rural sector 

3) Social sector including healthcare 

4) Educational skills and job creation to make India a knowledge based and productive economy 

5) Infrastructure investment to enhance quality of life 

6) Financial sector reforms 

7) Governance reforms and ease of doing business 

8) Prudent management of government finances 

9) Tax reforms to reduce compliance burden 

The Finance Minister concluded his speech with an observation that “…it is said that ‘Champions are made from something they have deep inside of them- a desire, a dream and a vision’. We have a desire to provide socio-economic security to every Indian, especially the farmers, the poor and the vulnerable; we have a dream to see a more prosperous India; and a vision to ‘Transform India’…”
Let us believe him, as the content of Budget 2016/7 has set out an approach road in the right direction for reaching the goal.

 M G Warrier


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