The new government should act to broaden India’s fiscal agenda

Fiscal provision for public examination processes will not take a big bite out of the exchequer.  (HT_PRINT)
Fiscal provision for public examination processes will not take a big bite out of the exchequer. (HT_PRINT)


  • The full budget is expected to be directionally in line with the interim one, although exam paper leaks and the climate crisis demand fiscal provisions for tackling these challenges. Every budget move should be evaluated against the backdrop of the monster that is global warming.

The final Union Budget for the ongoing fiscal year 2024-25 will be presented in the monsoon session of Parliament starting 22 July. It is expected to conform to the interim Budget presented before the elections by the same finance minister, Nirmala Sitharaman. But there have been some developments post the election process which call for new initiatives.

Examination paper leaks have roiled India. Public examination processes must have integrity in order to offer equality of opportunity, a key element in the social contract between the individual and the almighty state. The issue found mention in the President’s address to Parliament on the government’s agenda. Hopefully, it will find further mention in the Budget speech, with a focus on prevention.

Fiscal support for a selection and training centre for personnel inducted into examination administering agencies is urgently needed. The idea would be to ensure appointment of people fully trained in standard operating procedures for setting and securing exams in a variety of forms—paper-based or computer-based. The new unit could be added as a wing to the Union Public Service Commission (UPSC), which commands widespread trust and respect.

Also read: NEET-PG exam this month, question paper to be drafted 2 hours before test amid paper-leak row: Report

The surprising feature of the current scandals is that they involved national agencies. At the state level, the problem recurs frequently. Most recently, the written examination for the post of police constable in Uttar Pradesh scheduled for February 2024 was cancelled because of paper leaks.

Fiscal provision for public examination processes will not take a big bite out of the exchequer. There is the overriding concern, of course, of whether the fiscal deficit committed to in the interim budget, at 5.1% of GDP, will be achievable. The Cabinet has already taken a decision to hike minimum support prices for 14 crops, mostly in the range 5-8 % (with a few outliers), in accordance with the recommendation of the Commission for Agricultural Costs and Prices . 

Without knowing whether this increase was anticipated in the food subsidy in the interim budget, pegged at 2.05 trillion, it is not possible to estimate how much higher the food subsidy will be in the final Budget.

Standard macroeconomic prudence gets upended when confronting an economy with the fingerprints of global warming all over it. The present situation is that food (read vegetable) prices are rising in the face of the scorching heat wave that engulfed large tracts during the first quarter of the current fiscal year.

Every move in the Budget has to be evaluated against the backdrop of the warming monster that kills people (including staff on duty in the just concluded general election); that can drastically reduce agricultural productivity; can raise food prices and reduce real wages more than what seems apparent from an overall CPI index. 

It has caused forest fires in a region where the major river systems of the country originate. It has led, exacerbated by decades of predatory exploitation, to severe water problems in major cities. In short, it has the power to destroy us.

Moody’s Ratings has said public failure to address water scarcity could lower the credit rating of India. Maybe that will prod the finance ministry into placing climate warming front and centre. Short-term indicators like the Purchasing Managers’ Index do not matter as much as frequent disruptions to economic activity posed by climate forces, which can become more frequent and disruptive over time. The time to act is now.

Also read: Exam mess casts cyber scare over education

There is need for a new Central government initiative with municipalities. Within that umbrella, partnerships can be taken up in sequence with cities which put forward a viable programme for restoring underground aquifers. It can work like the Scheme for Special Assistance to States for Capital Investment, with the difference that cities would be invited to come forward with financial proposals for specific projects.

These city partnerships need not be fully funded by the Centre. There could be special purpose vehicles for each Centre-city partnership, financially contributed to by private individuals. The Forbes-list billionaires residing in big Indian cities could surely throw a few pennies into that hat, drawing inspiration from the famous 1975 rescue of the New York City municipality from bankruptcy by a financial vehicle formed by high-net-worth residents. But project supervision must be assigned to a board of engineers with professional credibility, unrelated to the financiers.

The flooding during the monsoons of several large cities with concomitant mixing of sewage and drinking water is a continuing health-hazard disgrace. The annual flooding of the Minto Bridge underpass is so predictable that it has become the signature of the monsoon in Delhi. A major commercial centre like Bhikaji Cama Place is periodically assailed by the stench of sewage overflow even in non-monsoon months.

What about the ambient warming brought about by global forces? Air-conditioners to cool interior spaces pump hot air into the exterior world, turning urban public spaces into furnaces. 

Subsidies to incentivize retrofitting of air-conditioners with more efficient motors at lower energy intensity and insulation of roofs and windows have been tried in other countries. We need to study initiatives successfully implemented elsewhere, such as country schemes within the Green Deal of the European Union, and build on them.

Also read: Budget to unveil major reforms, roadmap for Viksit Bharat: President Murmu

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