oppn parties Needed - A Growth-Oriented Budget This Year

News Snippets

  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
  • Supreme Court rules that the decisions of the GST Council are not binding on the Centre and the states, leaving the door open for states to levy further taxes
  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
  • Akasa Air might postpone its July launch due to late arrival of aircrafts
  • Metro Cash & Carry decides to sell Indian operations. All major players, including Reliance retail and Amazon, are likely to bid
  • Local and global cues spook the markets on Friday - Sensex crashes 1416 points to 52792 and Nifty by 430 points to 15809
  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
oppn parties
Needed - A Growth-Oriented Budget This Year

By A Special Correspondent
First publised on 2022-01-23 08:29:13

This year's Union Budget will be presented at a time when the economy has gone through the ups and downs of two debilitating years of pandemic-related disruptions and three waves of infections out of which the first wave was hugely disruptive for the economy while the second wave brought the country's health infrastructure to the brink of collapse. It will also be presented at a time when there are signs of economic recovery but also signs of distress in some sectors, rising unemployment, rising inflation and upheavals in the informal sector. Hence, without doubt, the Budget needs to rise above just being an accounting exercise and needs to provide a vision, a roadmap of growth in the medium term.

Although economic indicators such as GST collection, Product Manager's Index and exports are all showing healthy improvement since the festive season began in September this year after the country recovered from the second wave of infections, demand has not actually climbed up substantially. Indian economy was suffering even before the pandemic as demand was sluggish. Hence, to compare current demand for goods and services with the 2019 levels will not suffice. Further, due to inflation, sales figures might seem high but are actually not above pre-pandemic levels when compared on the basis of units sold, except for some sectors like automobiles (despite shortage of chips).

Hence, the budget must pay attention to ways to generate demand. Only rising demand for goods and services will make the wheels of economy start turning at the desired speed by infusing a spirit of positivity. Economic activity will pick up substantially if the government starts investing in infrastructure projects. That will create demand for the core sector and the cascading effect will invigorate the entire economy. Demand from semi-urban and rural areas will be generated when the agricultural sector performs well (which it has been doing despite the pandemic), government buys produce from farmers and the mandis operate well and the government keeps providing work and funds for MNREGA.

The Budget also needs to identify sectors which are still in distress and provide them the help needed to get back in shape. It also needs to ease rules for new-age businesses. It must also speed up the divestment process (which came to a standstill in the last fiscal) to generate funds. With the government doing a good job of managing the fiscal deficit even in the face of rising expenses, the Finance Minister will not be overly worried about this. But the time has now come for the government to seriously think of making huge investments in infrastructure projects to kick-start the economy. All indicators show that the economy is ready to leap ahead - it needs a strategic push and only the government can provide that. 

Feedback: We would love to hear your opinion about this article and India Commentary. Please email your opinions at editorialindiacommentary@gmail.com