The goods and services tax (GST) is finally here, so perhaps now is the time to reflect on how the budget can be updated for a post-GST India. Just as the GST aims to create national uniformity in taxation, rethinking budgets can also push efficiency. A bold step the government can take is doing away with narrow ministerial distinctions when schemes or programmes have intersecting stakeholders and benefits. Instead of top-down, government spending could be rethought bottom-up. In fact, one could even allow ministries to compete for budgetary support if the ultimate service or benefit is similar or the same. In many cases, just a little bit of gap funding can mean the difference between two different options, one better than the other but left out today, such as helping us switch from kerosene to electricity for lighting. This is a subset of the broader challenge of how we measure and allocate co-benefits—these will spill across ministries. For example, an electric vehicle isn’t just about lower operating costs, reducing oil imports, or even reducing carbon —a significant co-benefit is lower local air pollution. Perhaps future budgets can use a service model for allocating funds. If it’s lighting we want, electricity is far superior to kerosene. We could even allow the power sector to lay claim to such money, almost in a competitive model. Current beneficiaries of money might resist, but we cannot let legacy reasons, turf wars, or even mindsets stand in the way of improved services, which is the overall goal of government budgets.

(Live Mint)