oppn parties Needed - A Growth-Oriented Budget This Year

News Snippets

  • India becomes the first country in the world to make flashing of anti-tobacco warning on shows on OTT platforms
  • BJP says that by targeting PM Modi on his visits abroad, Rahul Gandhi is denting India's image
  • Nepalese Prime Minister PK Dahal Prachanda arrived in India on a 4-day official visit in whihc border issues and several others contentious issues will be discussed
  • Even as Home minister Amit Shah tours Manipur and holds peace talks, violence continues in the state after a lull of one day
  • PM Modi says that boycott of Parliament inauguration by some opposition parties was an insult to the nation
  • Allahabad HC upholds Varanasi district judge's order that petition for worshipping Shringar Gauri in Gyanvapi mosque is maintainable and can be heard
  • Rahul Gandhi says if PM Modi were to meet God, he is such a 'specimen' and know-all that he would start explaining to God how the universe functions
  • Deloitte raises flags in Adani Ports' dealing with three entities regarding disclosure of facts
  • Centre meets the fiscal target of 6.4% in FY23
  • Data released by NSO shows India's GDP grew at 6.1% in Q4 and 7.2% in the full year in FY23
  • IOC takes cognizance of police action on wrestlers, asks IOA to protect athletes
  • World Rapid Chess champion Magnus Carlsen says India is doing a lot of right things and will soon emerge as a powerhouse nation in chess with scores of talented youngsters
  • Thai Open badminton: PV Sindhu & K Srikanth ousted, but Kiran George stuns third seed Shi Yu Qi 21-18, 22-20
  • The lone Congress MLA in West Bengal, Bayron Biswas from Sagardihi, who won in a byelection recently, joins Trinamool, Congress says such 'poaching' not good for opposition unity
  • PM Modi says every move of his government is guided by the wish to improve the lives of the people
Excellent GDP growth: Q4 at 6.1% and FY23 at 7.2%, beats all estimates
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. 

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