Now that we have your attention, we will slip in the fact that this week's column is actually about the Union Budget. If we had stated this in the first paragraph, you would not have come thus far.
This year's Budget is going to be historic because this is the first time that it will be presented on February 1. The Budget has never been presented on February 1 for a valid reason -- most Finance Ministry staff never report back to duty, after the Republic Day holiday, that early. This is why we have had Budgets in February-end or even March-end, when there had been sufficient time for the government officials to return from the R-Day weekend (For government staff, it is always R-Day telescoped into the weekend even if the Republic Day falls on Monday).
This year though they seem to have been thrown the threat that if they did not come to work early the Prime Minister will announce one more demonetisation. So, we will have the Union Budget on February 1.
And before that, here we attempt to explain a few important aspects of the Budget through a 'Q and A', because it is a handy format to waste a lot of space.
Q: What are the implications of an early Budget?
Ans: An early start usually means the ball will swing a lot and the fast bowlers will have plenty of purchase both on and off the pitch. Oops, this is what happens when you have a cricket reporter writing on the Budget.
The early presentation of the Budget means that the halwa will actually taste a lot better on a late wintry day than during early summer which will be the case if the Budget is presented Feb-end or March.
Q: What is this halwa you are talking about?
Ans: The preparation of the Budget, as you'd appreciate, is an ultra secret affair. Only the Finance Minister, a selected few officials of the Finance Ministry, the Ambanis and the Adanis know what is in the Budget papers.
Ha. Ha. Ha. Just kidding. The Finance Ministry folks generally have no clue on what is in the Budget papers.
Anyway, on the day the Finance Ministry gets down to the task of printing the Budget papers, a small ceremony is held at the North Block and halwa is prepared in a big kadhai and served to the entire staff in the Ministry. The halwa is prepared to a World Bank-mandated gluey consistency so that it keeps the Finance Ministry officials mouth totally shut and the Budget info is not leaked to others.
To summarise: To prepare a good Budget, you need a team of expert Finance guys and one kickass halwa cook.
Q: This halwa thing is quite fascinating. Is there more to it?
Ans: Oh yeah, when N D Tiwari was the Finance Minister in Rajiv Gandhi government, it was widely believed that the Union Budget itself was prepared by the halwa guy.
Q: How did they find out?
Ans: The budget papers were sticky. Since N D Tiwari was the Finance Minister everyone thought they knew the reason (*wink, wink*). But when the proposals had double rebate on personal income tax for costs incurred on gajar ka halwa everyone kind of understood who had prepared the finance papers and what the Finance Minister must have been doing on the nights of presumed Budget work.
Q: Okay, off with these extraneous stuff. Which is the biggest challenge facing Arun Jaitley in this Budget?
Ans: The mounting fiscal deficit is without a doubt must be his biggest worry. It has grown so big that we are told that it is now visible from outer space.
Q: What is this fiscal deficit and how is it computed?
Ans: Say, you are in the market for a new TV because you think your old TV bought 7 months ago seems obsolete ("The remote doesn't take voice command"). And you find a TV that you are happy with. But its price is beyond your budget. (All products you like are always above your price range.)
You don't have the money for the TV. You fret, but kind of reconcile to the fact that you have to continue operating the remote by laboriously pressing its buttons and not by calling out commands. But wait. You have the credit card. So you go ahead and swipe it, hoping to settle the bill the next month. But hell, you had already bought with your credit card an expensive necklace for your wife to compensate for the fact that you had completely forgotten her birthday the previous month. That reminds us, you had also picked the tabs at an expensive pub, just to show off, when you had a small get together with some old school friends. And then there was this bill for that Internet site which purveys... okay, we will not bring that up.
All the bills you have run up will take months to repay during which time you will run up even more.
Basically what this means is you have been spending money despite not actually having it. The government is a lot like you. In fact, a lot worse than you. You at least have your wife to check you from your improvident spending. The government has none.
In the event, the government has run bills worth several crores of crores of rupees that look like that they will never be paid. This is its fiscal deficit.
Q: What is the solution to this?
Ans: Indeed, the RBI has to send a few thugs to the Finance Ministry to get the government pay up. But ask it to go easy on that poor halwa guy.
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