Measuring the Quality of Union Budgets: Need to Go beyond the Deficit Measures

AuthorKaramjeet Kaur
Published date01 June 2017
Date01 June 2017
Subject MatterArticles
Indian Journal of Public
63(2) 187–195
© 2017 IIPA
SAGE Publications
DOI: 10.1177/0019556117699733
1 Third Secretary (Economic), Embassy of India, Washington, D.C.
Corresponding author:
Karamjeet Kaur, 2107 Massachusetts Avenue NW, Washington, D.C. 20008, USA.
Measuring the Quality
of Union Budgets:
Need to Go beyond
the Deficit Measures
Karamjeet Kaur1
In the run-up to Union Budget 2016–2017, a major difference of opinion
emerged within the Union Government over adherence to fiscal consolidation
vis-à-vis maintaining adequate expenditure allocation for essential services, such
as health, education and infrastructure development (Business Standard, 2016).
As the budget document was unveiled, it was clear from the deficit targets met
(and sought to be met in the future) that the government did not deviate from
its commitments towards fiscal consolidation. These deficit targets, however,
provide limited understanding of the overall ‘quality’ of expenditure and receipts
of the government. In order to comprehend the overall picture and quantify
this qualitative aspect, there is a need to go beyond the conventional measures
of deficit. This article discusses the concept, meaning and usage of the various
measures of deficits in order to, first, highlight their limitations in understand-
ing the overall quality of budgets and, second, make a case for creation of a
‘composite index’ to reflect the broad quality and composition of budgets. A
modest attempt has also been made in this article to evaluate the Union Budgets
of the recent years on the basis of one such index developed by Bhide and Panda
(2002). Results provide concrete evidence of a discernible improvement in the
quality of budgets in the past few years.
Deficits, composite index, quality of expenditure

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