Departure from the past

The BJP has made many procedural changes to the Budget exercise

Finance Minister Nirmala Sitharaman’s decision to carry her Budget speech in a prominent red bahi khata, the traditional cloth folder that has been used by indigenous businesspeople for centuries, instead of the usual leather briefcase marked a small but significant break from established practice through seven decades of Budget presentation. Multiple political symbolism was embedded in her decision: The reiteration of the Bharatiya Janata Party’s (BJP’s) nationalist, swadeshi ideology and the jettisoning of leather, a subliminal reminder of the anti-cow slaughter movement that was at the centre of Narendra Modi’s first stint as prime minister. This may have been the reason for curmudgeonly comments from P Chidambaram, who has presented eight Budgets, that the Congress would present its Budget on an iPad. But in this much-reported procedural departure, Ms Sitharaman was not actually blazing a new trail. If anything, the BJP has been instrumental in a series of similar small but significant alterations in the presentation of India's annual accounting exercise.

The changes began with the BJP’s first full stint in power under Prime Minister Atal Bihari Vajpayee. In the 1999 Budget then Finance Minister Yashwant Sinha advanced the time for presenting the Budget from 5.30 pm to 11 am, a decision that managed to combine rationality with the political message of India’s arrival on the global stage at the turn of the century. The evening schedule was a hangover from the colonial past when decisions concerning Britain’s Jewel in the Crown impacted the City. The exercise was timed, therefore, to coincide with the opening of the London Stock Exchange. It is hard to explain why finance ministers persisted with this timetable — a bane for bureaucrats and media alike — for over half a century after independence. At any rate, it reflected sheer inertia embedded in the bureaucracy (also a colonial inheritance) until the sheer illogic of the timing occurred to Mr Sinha, a former bureaucrat turned finance minister. 

The next change came in 2003-04 under Jaswant Singh, the second finance minister in Mr Vajpayee’s government. Till then, Budgets were presented in two parts, A and B. The first, which virtually doubled as a quasi-State of the Union address, usually set out the government’s broad objectives for the economy and announced allocations for new and extant schemes that would enable them. Part B represented the business end of things, which interested the middle class and the business community: changes in direct and indirect taxes. For reasons that were never clarified, Mr Singh did away with this distinction, the value of which was unclear (Ms Sitharaman, in fact, restored that format). 

In Mr Modi’s first stint, two consequential changes were made, which also marked departures from colonial traditions. The first was part of a plan by the government to change the financial year from April-March to January-December. Former Finance Minister Arun Jaitley presented the 2017 Budget on February 1, a month ahead of the old schedule. In the same Budget, the government also did away with the nine-decade tradition of presenting a separate Railway Budget the day before. Instead, the Railway Budget was merged with the full Budget. The benefit of the first change was unclear, since it meant that the data on which the government would base its annual accounting exercise would necessarily be incomplete -- only April-November figures would be available. The second, however, had a rationale since the Railways’ accounts are closely linked to the government of India’s via gross budgetary support.  

Ms Sitharaman's decision to opt for the bahi khata may be an innocuous one. More consequential was the exclusion from the Budget speech of all mention of hard numbers, including the fiscal deficit, the single most important metric for the financial and business community. The political messaging, thus, ended up overshadowing economic management.