ContentsChapter-11.introduction2.Objective3.Limitation4.Scope5. MethodologyChapter-21.Overview O the !conomy2. "#$ growth3. %gricultural $roduction4.$rice&5.'ndu&try and &ervice&(.!)ternal Sector*. Money ban+ing capital mar+et&,. -entral government .nance&Chapter-31./inding&2.Sugge&tion3.conclu&ion4.0ibiliography-1%$2!3411. 'ntroductionThebackdropforlast yearbudget andthegovernmentsfscalconsolidation eforts is an economy that is growing at abelow at trend rate as we transactions fromthe largestresources investment boominour historytobroader basedgrowth. Over thepast decade, investment intheresourcessector hasmorethanquadrupledasashareof !"anditscapital stock is now three times larger. #owever from $%&'(&),resourcesinvestment ise*pectedtostart sharplysubtractingfrom growth. +e are seeing some positive sign, particularly inhousehold sector. ,ut with business in the non(resources sectorscontinuing e*ercise caution in their investment and hiringdecisions, the forward indicators suggest that it will be at leastanother year or twobeforestrongboard(basedgrowthtakeshold. -gainst this backdrop, the government fscal consolidationmeasures are weighted towards medium term structural savingsthat build over time with the $%&'(&) budget imposing modestadditional fscal consolidation over the ne*t three years relatingto the $%&.(&' /012O.2. Objective542.1. There are diferent types of policies adopted by agovernment. This policy concerning the revenuee*penditure and the debt of the government for achievingcertainimportant ob3ectivelikecontrol of in4ationpublice*penditureetc. various ob3ectiveof macroeconomic ofunion budget are discussed below.2.2. 1conomic developed5 ( 1conomic development is animportant feature of under developed countries. To achievedevelopment of a country macroeconomic acts as a sourceof capital formation because as capital formulation isincreases production and employment also increases.-ppropriate fscal policy is required for developmentcountries like 6ndia.2.3. 7eduction in economic inequality5 ( 6n democraticcountrylike6ndiatheprominentaim offscalpolicyistoremoveeconomicinequality. Theincomegeneratedfromthese ta*es id used for the welfare of the poor masses.2.4. 2ull 1mployment5 ( The main aim of the everygovernment is to attain full employment level. 82ullemployment simplymeans that manpower is readytoworkat prevailingwageratewithout anydispute.9Totalproduction increases and as a result employment will alsoincrease.2.5. "rice stability5 ( -nother ob3ective of macroeconomic ispricestabilitywhenpricerisei.e., in4atione*istsinaneconomy. 2iscal policyaimsatdecreasesindemandandaggregatee*penditureandta*rateisalsoraised. 1*trapurchasing power of people goes into the hands of generalpublics and demand decreases because of e*cess. :upply,price automatically goes down because of fear of stocks.3. Limitation543.1. 6n adequate statistics5 ( 6n the countries like 6ndiaadequate and reliable data is not available. ,ecause of inavailability of reliable and accurate data the area of fscalpolicy is not 3udged properly.3.2. ;ack of elasticity5 ( The ta* system in 6ndia is not thatelastic as it is supposed to be. /oreover in this economybecause of huge ta* evasion it is die sector5 ( -lthough each and everyactivity is how awarded in term of money. ,ut still a ma3orpart of economy of ?!@: like 6ndia is non moneti>ed.3.4. !elay in decision 5( 2iscal policy decision needsapproval bythegovernment lot of timeis requiredforapprovals that is why decision are not taken at proper time.3.5. ;imited sector5 ( 2iscal policy only afects few sectors ofthe economy. /ost of the sectors remain untouched.4. Scope 544.1. The outlay of the new budget stands at TA $.) trillion,up by &$ per cent from the previous TA $.$$ trillion.4.2. The!"growthtargetsareB..percent inthelastbudget, this target was B.$ percent, but was later reviseddown to C.) percent.4.3. 6t plans to keep the average in4ation within si* percent.6n the last budget this target was B percent. ,y the end of-pril, the average in4ation was B.'B percent.4.4. 7evenuetarget is set at TA&.D$trillion, almost B.percent of the budgetary outlay.4.5. ,udget defcit stands at TA &.D$ trillion, which is fvepercent of the !".4.(. ,orrowing from the banking sector stands at TA .&$.$&billion down from TA ))%..$ billion in the last budget.4.*. TA&$.)Cbillion is set to besourcedfromsavingscertifcates and non(banking sources.4.,. The si>e of the annual development programme for thecoming fscal id TA D%..&) billion.4.6. The share of #uman 7esources :ector, which includeseducation and health, in the -!" is $'.. percent.4.17. The overall agriculture sectors share is $).Dpercent, power and energy sectors allocation will be &'..percent.5. MethodologyThe data have been collected from secondary sources likereports, monthlybulletins, 3ournals, maga>ines, annual reportetc. They have been analy>ed with help of important statisticaltechniques. 6t mayalsocollect fromthewebsiteof centralgovernment.-hapter42Macroeconomic budget 2714415he present government has inherited an economycharacteri>ed by low growth, high in4ation, high currentaccount defcit and large fscal in balances at the unionlevel. +hat was struck me about union budget $%&'(&)is not the fscal arithmetic, but the macroeconomic framework.The 2iscal7esponsibility and ,udget /anagement E27,/F -ct,$%%. and the 2iscal 7esponsibility and /anagement 7ules, $%%'made under section D and of the -ct has come into force withefect from )thGuly, $%%'. 6n sync with the changedmacroeconomic circumstances after globalfnancialcrisis. The27,/E-mendmentF -ct, $%&$waspassedbytheparliamentand got the assent of the "resident of 6ndia on $Dthmay, $%&$.-ccordingly revised targets were set for various fscal indicators.=ew rules under amended 27,/ -ct, $%&$ were notifed on /ay$%&..?nder section B of the -ct no deviation is permissible inmeeting the obligations caste on the central government underthe act, without the approval of parliament. +ith moderation ineconomic growth from the level of H percent in $%&%(&& to '.)percent in $%&$(&.. overnment was steadfast in itscommitment to words fscal rectitude a consolidated further infnancial year $%&.(&'. The economic growth rate has remainedbelow)percent level forpast twosuccessiveyears. eneralTbudget $%&'(&) is being presented against early signs ofeconomic recovery. ,udget $%&'(&) steps towards fulflling thecommitment set inthenew27,/regime. Therearevariousstep of macroeconomic of union budget are as follows5( Overview o the economy I rowth of ross domestic "roduct E!"F at factor cost atconstant$%%'(%)pricesdeclinefromD.HJin$%&%(&&toC.B J in $%&&(&$ and further to '.)J in $%&$(&.. There wasamarginal improvementin$%&.(&'with!"growingat'.BJ. /acroeconomic stabili>ation in $%&.(&' had tobalancetheconcerns of containgelevatedin4ationandpromoting growth. "#$ "rowth 8 -s per the provisional estimates relised by the central:tatisticsOe investment and revive demand in the economy. 6nfact, the various measures that fnd mention in the :urveyraise e*pectations that the ,udget would be a mostprogressive one2.2. 6t is eminently feasible to revive investment and scripta turnaround in growth provided the government adopts athree pronged approach of creating a framework forsustained low and stable in4ation,setting publicfnancesonasustainablepathbyta*andadministrativereformsand creating a legal framework for a well(functioningmarket economy.2.3. 6ndian economy is likely to grow in the range of ).' to).H per cent in $%&'(&) overcoming the sub() per cent !"growth of past two years, even as poor monsoonanddisturbed e*ternal environment remain a cause forconcern, the 1conomic :urvey noted.2.4. 6n our view, growth this year could be nearer the lowerendof thebandindicatedinthe1conomic:urvey. Theoutlookfor agricultureisweakduetoe*pectedsub(parmonsoon. 6n this conte*t, managing food in4ation becomesan even higher priority.2.5. +e hope that some of the concerns and prioritieshighlighted by the :urvey like controlling fscal defcit,better subsidy targeting and focus on infrastructure and manufacturing are addressed right awayin the ,udget tomorrow EThursdayF.2.(. "ointingout that not all themoneyput intosubsidyschemes reaches the poor, the survey suggested paymentof subsidyincashfor thosebelowpovertylinethroughtechnologies like biometric identifcation, observing thecurrent methodology has led to distorted resourceallocation.2.*. 7ationali>ation of subsidies on inputs like fertili>ers andfood is essential to achieve fscal consolidation. oingahead, serious eforts are needed to re3uvenatemanufacturing sector growth tra3ectory since the last manyquarters.2.,. +ith 6/! department predicting a B& per centprobability of a sub(normal or defcient monsoon andspatial distributionof rainfall, thepre(budget documentsaid agriculture output is likely to be impacted andconsequently food prices.3. -onclu&ion54The economic growth plummetedP identifying the plausiblepolicy priorities from growth revival is the single most signifcantagenda before the government. +hat was the policy prioritieshighlighted in ?nion budget $%&'Q There is simultaneouslycontinuity and a change. The change relates to the newmacroeconomic consensus to undertake in4ation management.Thefnanceminister has endorsedtheneedfor an8anewmonetary framework 8in his budget speech. This announcementby fnance minister needs to be co read with the ?r3it "atel re(commendations for central bank independence, and ruled basedmonetary policy. - new consensus gaining momentum in 6ndia.?nion budget has set a board path to address the issues relatedto R policy paralysis R, which include infracture investments, ta*reforms, controlling bad subsidies and governance reforms.Though the revival of fscal dominance is widely acknowledged,has a new discourse in 6ndia, after match to ?nion ,udget $%&'Q4. 0ibiliography54www.cbo.gov.inwww.fnance.gov.iewww.3stor.orgwww.imf.org