New Delhi, July 12 -- The Union Budget is the biggest economic policy event in India. It is to be expected that the government defends it, and the Opposition criticises it. This debate ideally should be focused on policy decisions such as tax rates, expenditure allocations and special incentives for sectors which need them. Any such debate, however, is based on the sanctity of numbers given in the budget. If there is reason to believe that the budget numbers are not sacrosanct, then differences about the budget assume a completely different nature.

Maintaining such sanctity is not an easy task. This is because budget numbers are essentially projections. The government assumes a nominal GDP figure for the next fiscal year. It then projects ...