The formal responsibilities of the Ministry of Finance for the management of the Union government’s Budget have a deep effect on the economy because of the high scale of public spending as a proportion of gross domestic product or GDP; the demands of the Union government on savings; and the impact of decisions about taxes and subsidies on private concerns about consumption, savings, investment, exports, and imports. Hence, the primary aim of the Budget must be to design these formal responsibilities in such a manner that:
(a) Macroeconomic impact is consistent with short- and medium-term objectives about inflation and growth.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper