Finance Minister Arun Jaitley with MOS For Finance P Radhkrishnan', MOS For Finance Shiv Pratap Shukla, and with the full Budget Team while giving final touches to the Union Budget 2018-19 in New Delhi. Photo: Dalip Kumar
Finance Minister Arun Jaitley will present the fifth and last full Budget
of the Narendra Modi-led government's first term on Thursday. He is the first finance minister in National Democratic Alliance (NDA) governments to present all five Union Budgets in a term. In the previous NDA government, headed by A B Vajpayee, the then finance minister Yashwant Sinha was replaced by Jaswant Singh in 2002.
Call it sheer luck of soft commodity prices or better management, the National Democratic Alliance (NDA) government
was able to control inflation much more efficiently than the legacy handed down by the UPA government.
However, it could not accelerate economic growth much. UPA had left with economic growth of 6.4 per cent in 2013-14 and NDA accelerated it to 6.5 % in 2017-18, if advance estimates come correct. The range of 7-7.5% for 2018-19 is projection only. The culprit for slow growth was demonetisation and goods and services tax (GST) as the economic growth had really picked up in the first two years of the Modi government.
GST also slowed down projection for tax revenues growth for 2017-18 compared to the previous year, but it was still higher than where the UPA government left. The government better managed its expenditure in the sense that while they slowed down growth in outlays, it was primarily on the revenue expenditure side despite pay hike for government employees in 2016-17. The NDA government paused on fiscal consolidation twice -- in 2015-16 and 2017-18. One has to wait for a few hours to see whether it will pause for 2018-19 as well and whether even bit of relaxed fiscal consolidation would be adhered to for 2017-18 or not.
Note: *Advance estimates in 2017-18, **Economic Survey’s projection, ***First half of FY18; BE: Budget
Estimates Sources: Budget
papers, Central Statistics Office, Controller General of Accounts, RBI, Economic Survey 2017-18