Union Finance Minister Nirmala Sitharaman with Ministers of State for Finance Bhagwat Kishanrao Karad and Pankaj Chaudhary and officials during the ‘Halwa’ ceremony to mark the final stage of Union Budget 2023-24, in New Delhi, Thursday, Jan. 26, 2023. (PTI Photo/Manvender Vashist Lav)

GDP growth: The Survey said India’s growth estimate for FY23 is higher than for almost all major economies. “Despite strong global headwinds and tighter domestic monetary policy, if India is still expected to grow between 6.5 and 7.0 per cent, and that too without the advantage of a base effect, it is a reflection of India’s underlying economic resilience; of its ability to recoup, renew and re-energise the growth drivers of the economy,” said the Survey.

Inflation: The RBI has projected headline inflation at 6.8% in FY23, outside its comfort zone of 2% to 6%. High inflation is seen as one big factor holding back demand among consumers. However, the Survey sounded optimistic about the inflation levels and trajectory, saying “it is not high enough to deter private consumption and also not so low as to weaken the inducement to invest.”

Unemployment: The Survey said “employment levels have risen in the current financial year”, and that “job creation appears to have moved into a higher orbit with the initial surge in exports, a strong release of the “pent-up” demand, and a swift rollout of the capex.”

It pointed to the Periodic Labour Force Survey (PLFS), which showed that urban unemployment rate for people aged 15 years and above declined from 9.8% in the quarter ending September 2021 to 7.2% one year later.

The Survey also underlined that the fall in unemployment rate is accompanied by an improvement in the labour force participation rate.

Chief Economic Advisor V. Anantha Nageswaran presents the Economic Survey 2022-23 during a press conference, in New Delhi, Tuesday, Jan. 31, 2023. (PTI Photo/Manvender Vashist Lav)

It is true that Union Budgets tend to differ from one year to another. However, here are five metrics on which any Union Budget must come through.

The Budget speech: The speech introduces the Budget to the public. Shorn of all the chatter around it, the Budget is essentially an annual financial statement. What the public needs to know is whether they will be taxed more or less, whether the government will be able to make its ends meet (and if not, then how much will it borrow from the market) and, lastly, where will the government spend all its money.

The Budget numbers: The whole Budget is based on certain assumptions of economic growth and revenue buoyancy. But sometimes the government’s assumptions leave everyone puzzled.

Fiscal and Revenue deficit: When the latest Budget is presented, the fiscal deficit figure should be read in conjunction with the revenue deficit data to understand how much of money that the government intends to borrow in the coming financial year will be used towards paying everyday bills and how much of it will go towards boosting the productive capacity of the economy.

Revenue targets: A particular problem is that often the disinvestment target is calculated at the very end of government’s revenue calculations — that is, after revenue assumptions from all other sources are already made. As such, there is a great temptation to stretch the disinvestment target depending on the gap that needs to be filled.

This practice often leads to unrealistic disinvestment targets. This, in turn, undermines the credibility of Budget numbers. That’s because if the disinvestment target is not met in a particular year, it immediately means the fiscal deficit will expand from the budgeted level.

Expenditure: In allocating expenditure, the trick lies in figuring out the country’s priorities.

No country has risen to dominate the world without first substantially investing in the health and education of its people. All the hopes of India becoming a superpower are contingent on India leveraging its human resources. But while much is made of the promise of India becoming the back office of the world, little is thought of the threat of automation.

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