1. Indian
Budget
is not a secret now

2. Once considered as a
top secret affair, the
budget related matters
has initiated an open
approach with domestic
audience and has now
gone global

3. Finance minister pledges
the fiscal deficit to reduce
it
5.3% of GDP and cut it
further
to 4.8% in 2013-14

4. Open Budget approach
has succeeded
Credit rating agencies is
no longer threat
With right action plan
Chidambaram restored
India’s global credibility

5. Investment analysts have upgraded
their expectations for India
Billions of dollars have flowed
in, strengthening the rupee and thus
helping tame inflation
This has enabled the RBI to cut
interest rates, further improving the
investment climate.

6. Earlier Budgets constantly
tinkered with tax rates on this
or that item
People with advance
knowledge could make money
buying or selling items before
the tax rate changed, so
secrecy was deemed
paramount.

7. In the bad old days, the
budget speech would
first specify proposed
government
spending, notably the
increase in annual Plan
spending

8. It would then specify
expected revenue, and
say this left too large a
gap to be filled entirely
by deficit financing
(which meant printing
money).

9. So, the Finance Minister
would say, I am raising
taxes on the following
items — and a long list
would follow, often
hundreds of items.

10. He sometimes cut tax rates,
typically before an election.
Such tinkering made it possible
to profit from budget leaks, so
there was total budget secrecy

11. The US has
always had an
open
budgeting
system

12. First the President announces
his budget proposals, then the
House of Representatives
produces its own version, and
the Senate produces a third
version.

13. These three sets of budget
proposals are then
debated, with the public joining
in, and finally a compromise
budget is hammered out

14. Such openness is a virtue in any
democracy. It also means that
the budget debate is not on
endless tinkering, but on broad
tax and spending philosophies

15. US budgets look at
spending and revenue
over years, even
decades

16. In the Indian earlier
days of blind self-
sufficiency, there was
no sense of India’s
place in the world

17. But after the reforms of
1991, India has become much
more globalised, with the ratio of
imports and exports to GDP
rising from 15 per cent to 45 per
cent

18. As India is far more
prosperous, also
means that the budget
calls to address a
global audience, not
just an Indian one

19. Thank You