It is not possible for us to follow the budget documents of other countries. Interest in the UK budget was triggered by their sugar tax. Then, the controversy over the withdrawal of pension over disability erupted. I am amused and tickled by the pickle that George Osborne finds himself in. I was stumped by the extraordinary energy he devoted to building up a special relationship with China. Not that I was amused by that opportunistic alliance-building. Many in the UK were stumped themselves. I had blogged on it here.
Arun Jaitley could either commiserate with George Osborne or somehow feel relieved that he is not the only one facing heat for budget measures.
Equally newsworthy was the Office of Budget Responsibility analysis on potential growth rate for the UK economy, productivity growth, etc. OBR has downgraded both. It takes some comfort from the fact that the US had downgraded productivity trend growth even more than UK had done.
For all those who keep egging central bankers to do what they are doing – with callous disregard for costs and non-accountability for supposed benefits – should pay attention to page no. 20 of the document, ‘Economic and Fiscal Outlook’ dated 16th March 2016 presented by Robert Chote (Press Conference Slides), the Chairman of OBR. Just as OBR had done, the Congressional Budget Office (CBO) in the US had downgraded trend productivity and potential output too considerably from the estimate made in 2016. Yes, this is the record for six years of QE and ultra-low to zero % interest rates.
OBR is a good site and it is good that it exists. It provides an independent assessment of the soundness of budget numbers and yet it is embedded within the government system.
India should think of a similar set-up. Perhaps, the Office of the Chief Economic Advisor to the Government of India could play that role too?