New Delhi, Jan. 30 -- For three reasons, the annual Union budget can only do so much to make a sizeable difference to the Indian economy:

One, policymaking is a round-the-year process and not concentrated in a singular annual statement like the Budget;

Two, states matter just as much, if not more, than the Centre; and,

Three, given its large debt and committed spending like salaries, the Centre has limited funds to try radical ideas.

Yet, even within that limited sphere of influence, the Union Budget has broad linkages with larger parts of the economy, leading to some second-order effects. Here are four of them, and how they play out:

One objective of the government would be to make people spend more. Consumption expenditure, by one ...