Introduction
Any budget is complex consisting of many things of varying importance. Often, people focus on things of their direct interest but miss the wider implications that affect them indirectly and may undo any benefit they may get directly. Thus, it is not only important to look at the trees but also the forest. So, it is important to analyse the Macroeconomic strategy of the budget.
Further, the budget is based on three things. First, analysis of the current economic situation, second, the scenario likely to prevail in the coming year and finally, what direction policy makers may want to give to the economy. It also needs to be kept in mind that there are lags. Announcements do not mean that what is being said will immediately happen. Even after implementation begins, it takes time for the results to follow. But it is always possible that the expected results may not follow due to a variety of reasons.
Thus, a budget needs to be analysed both for its short term and long term impact. Any contradictions between the short and the long term policies leads to their failure. For the country, the long term is critical but politically the ruling party may find the short terms gains more compelling. This article attempted to present an analysis of the Union Budget 2023-24 with these features in mind.
Current Economic Challenges
There are internal and external challenges facing the economy. Externally, the ongoing war in Ukraine and the `New Cold War’ are adding to India’s problems. Nothing much can be done with regard to these except making the economy more resilient. A stronger economy will be able to better deal with the external challenges.
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