Why India needs an independent fiscal council?

Pramit Bhattacharya of MInt argues for an independent fiscal council in India.

More interestingly, he points to this study which shows how interim budgets since 1991 (barring 2014 one) underestimate deficits and overestimate revenues:

Historically, interim budgets in India have consistently overestimated revenue growth and underestimated expenditure growth. An analysis of the projected, revised, and actual budget figures since 1991 by Deepa Vaidya and K. Kangasabapathy of the EPW Research Foundation showed that deviations from budget estimates tend to be extraordinarily high for budget estimates presented in interim budgets .

With the exception of the 2014 interim budget presented by P. Chidambaram, these estimates undergo sharp revisions in the next budget (when revised estimates are presented) and the deviation from budget estimates persists in the actual (and final) figures.

Hmm..This time is never really different when it comes to interim budgets…

 

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