Bibek Debroy: The budget assures us continuity in spite of uncertainty

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₹78,000 crore with an emphasis on the monetization of assets). Therefore, if the budget promises a fiscal deficit of 4.9% as a proportion of GDP, it is believable. So is 4.5% of GDP for 2025-26, the government’s pre-announced goal.

In part, this is because support for Bihar and Andhra Pradesh is through multilateral development agencies and not through the budget. The budget has traditionally been perceived through a tax lens, direct as well as indirect. It would have been unreasonable to expect it to bring about a change in indirect taxes (of the domestic variety), since that’s the purview of the Goods and Services Tax (GST) Council.

To quote Sitharaman, “To multiply the benefits of GST, we will strive to further simplify and rationalize the tax structure and endeavour to expand it to the remaining sectors." Who can quarrel with that? There are issues with import duties too and many people have rightly argued that basic customs duties are too high and that they lead to inverted rates of protection, compounded by regional trade agreements (RTAs). Accepting the problem does not mean one can jump headlong into solving it. A priori, it is not easy to determine what is a raw material, vis-à-vis an intermediate good.

With a spaghetti bowl of RTAs, most favoured nation (MFN) rates vis-à-vis levels of special ones are also not that obvious. Instead of ad hoc and arbitrary tinkering (there are some changes in the budget), the finance minister said, “I propose to undertake a comprehensive review of the rate structure over the next six months to rationalize and simplify it for ease of trade, removal of duty inversion and reduction of disputes." Given the complexities and a clear deadline of six months, one should not complain. A