What exactly is a populist budget, and why is it opposed so much?
Answers
A populist Budget typically spends on schemes that are just handouts to please people and don't have any enduring positive impact on the economy. Examples of such spending are waiving off farm loans, giving higher procurement prices for different crops to farmers and cutting income tax above the low slabs. Such spending can push up inflation and weighs down on the government's balance sheets, making it difficult to meet the fiscal deficit target. A positive aspect of populist spending is sudden boost to demand. A Budget can be popular without being populist if it is focused on the quality of spending that has long-term positive effect for the economy. For instance, spending more on irrigation than waiving off farm loans can prove more beneficial for the overall economy while also helping the farmers.