Our budget speeches capture the evolution of government policy

Source: The post is based on the article “Our budget speeches capture the evolution of government policy” published in Mint on 27^th April 2023.

Syllabus: GS 3 – Budgetary allocation

Relevance: About the evolution of focus areas in the Budget speech

News: The article discusses the focus areas of budget speeches from the 1990s to the present time.

Budget speeches provide a broad outline of the government focus areas and policies, they are going to follow in the near future.

What are the focus areas of the budget speeches from the 1990s?

The budget speeches in India have focused on eight broad themes – (i) infrastructure, (ii) technology and innovation, (iii) social security, (iv) human development, (v) food and agriculture, (vi) demographics, (vii) fiscal policy and (viii) boosting national income.

How did some of these focus areas evolve during the course of the budget speeches over the years?

Infrastructure: The announcement of infrastructure projects such as new railway lines, national highways, rural roads and port development has been a key part of the budget speeches.

Budget speeches of past decades talked of building basic infrastructure like roads and ports whereas now speeches emphasize on connecting and building synergies between existing infrastructure, freight corridors, logistics, etc.

India’s gross fixed capital formation (GFCF) as a share of GDP (at current prices) has grown from 23% in the 1990s to 28% in the 2000s and to 30% in the 2010s. GFCF is expected to be 29% of GDP in 2022-23. 

The central government aims to double its capital expenditure to 3.3% of GDP in 2023-24 from an average of 1.7% of GDP in the 2010s.

Technology and Innovation: Over the last 30 years, the central government has steadily adopted advancements in digital technology to improve administration and the delivery of welfare services.

The share of electronic payments in total retail payments (in value terms) is estimated to have grown from 11% to 86%. 

Climate Change: There has been focus on adapting and mitigating the dangers of anthropogenic climate change in the recent budget speeches.

Efforts to fight climate change increased in the early 2010s and this decade’s budgets extensively talk about increasing solar generation capacity, lowering carbon emissions and encouraging sustainable mobility.

Demographics: There has also been focus on using the word urban more than rural. It is because the proportion of India’s population living in urban areas has increased from 25% to 35% over the last three decades. 

Similarly, the mention of items relating to food and agriculture has declined, although budget speeches continue to appeal to ‘farmers’ as before.

Social Security and Human Development: The delivery of welfare remains a critical component of budget speeches.

The emphasis on human development through health and education has grown within welfare services, whereas the emphasis on social security such as pensions and food appear to have diminished.

The most recent budget laid emphasis on skilling and training across industries.

Must Read: Union Budget 2023-24: Key Highlights – Explained

What lies ahead?

Since 2019-20, the government’s narrative has become more focused on building infrastructure, fostering digitization and ensuring targeted welfare delivery.

Given that India is still developing into an economic power, it is important to continuously monitor and assess the Center’s performance on these fronts.