Annual Budget Hopes by Morgan Stanley
Chetan Ahya & Mihir Sheth/ Morgan Stanley
Is the importance of annual budget declining? Since India initiated the liberalization program in 1991, the central government’s annual budget has been the anchor policy instrument for shaping the reform process. Over the last few years, however, the importance of the budget has been diminishing. First, a large part of the major the tax rate changes (key function of the budgets in the 1990s) has been accomplished; second, the coalition dynamics make it difficult for the finance ministers to announce path-breaking reforms in the budget before arriving at a consensus with the coalition partners.
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