The purpose of the budget is to provide the government’s financial plan for the year. It gives a detailed account of what income the government will have and how it will spend its resources.
Sometime in the 1980s, it became a platform for announcing major reforms. The stock market started swinging in response to various budget proposals. Now, every year, people wait with bated breath to see what the budget will bring. But after 2019, it would be fair to say that the budget is irrelevant.
In 2019, Nirmala Sitharaman presented her first budget as the newly appointed Finance Minister of India. It was a detailed budget, as usual, with several tweaks in the tax code and a comprehensive spending plan. The stock market reacted sharply to some of her proposals – especially changes that she brought to how high net worth individuals and Foreign Portfolio Investors would be taxed. The stock market peaked before the budget and started falling viciously.
The fall in stock prices rattled the Finance Minister. Every Friday after the budget, there would be leaks from the Finance Ministry that there would be a press conference. Between June and August of 2019, the Finance Minister held multiple press conferences. In each of these events, she undermined her budget.
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