“Insufficient Measures in the Budget “
By Professor M.M. Goel
A close perusal of the proposals in the union budget 2022-23 of the size of Rs 39449909 crore (4.6% higher) by Finance Minister (FM) Ms Nirmala Sitaraman reveals that the measures taken in the budget proposals were necessary but not sufficient for the economy beyond pandemic versions. It should have given energy and enthusiasm to all the stakeholders in addition to PM Gati Shakti, inclusive development, productivity linked incentive schemes in 14 sectors and investment intentions of Rs 30 Lakh crore.
To sustain the momentum of infrastructural development, the Capex target expanded by 35.4 per cent from Rs 5.54 lakh crore to Rs 7.5 lakh crore may lay the foundations for job-led growth in the pandemic proof economy but needed PPP model in letter and spirit.
It has to be noted that FM proved to be brave to say no to Ballot-oriented Populism (BP) which could have enhanced the BP of all the stakeholders in the long-run but is a sermon to be kept in mind by all the political parties to come in power.
To be targeted for Swarnim Bharat in 2047 with blue print for 25 years is well received and convey the confidence of the politicians in power with no opposition to Needonomics School of Thought with commitment.
The measures for protection from uncertainties of the covid era are necessary but not sufficient and call for needo-education of the stakeholders including consumers, producers, distributors, traders and politicians in power and opposition. The observed shift from welfare spending to investment is welcome step but we have to ensure proper monitoring based on the canons of public expenditure by Dr. B.R. Ambedkar in terms of faithfulness, wisdom and economy in execution. The little decline in subsidy allocations is a welcome step in the right direction. But the assumption of no more shocks of the pandemic is ill founded but merely the wishful thinking and we should be alert, aware and awake for the causing uncertainties.
The intent of taking firm steps for achieving a fiscal deficit (FD) of Rs 1661196 (6.4 per cent) in 2022-23 to reduce to 4.5 per cent of GDP by 2026 are missing and lost in omicron challenges. ‘More Returns’ from ‘Less Expenditure’ with a cost-effective approach needed to reap from today’s investment for tomorrow.
There was little maneuvering space for 80 per cent of total expenditure as pre-committed (interest payments, pensions, salaries, defense, grants to 28 States and 9 UTs).
It should be noted that the Academic Bank Credit (ABC) of NEP 2020 can enhance students’ confidence index (SCI) and may reduce educational inequalities and justifies Capex in education for needo-education for needo-employability and needo-entrepreneurship. The permission for world-class foreign universities in GIFT city in Gujarat, free from domestic regulation is not in good taste but a confession that we are weak. The excessive stress on digitalization may have implications but calls for cyber laws to take care of the cybercrimes.
Measure for price stabilization of perishables under Operation Greens Project TOP (Tomato, Onion and Potato) to fruits and vegetables are better than subsidies and deserved higher allocations. Storage facilities under PPP mode for food preservation using irradiation technology is an innovative approach as an alternative to FCI which has proved villain for the farmers. Rs 2.37 lakh crore for continuing with MSP are insufficient for want of needed reforms in agriculture sector.
There are no announcements for taxpayers for reducing effective tax outgo to make them feel good except updated returns can be filed within 2 years from the relevant assessment year. No change in the tax slab as a stable and predictable tax regime is not in good taste.
It is believed that sustainable growth in private consumption is needed for converting a $ 3.1 trillion economy into $ 5 trillion Indian economy but the risks on high inflation may not be in good taste even if it is cost push inflation higher on WPI to CPI based.
Bad Bank is an innovative step as banking reform if implemented without loopholes for defaulters to enter into litigation and create uncertainties in the banking system. There is a need for introspection on income and wealth inequalities as the world inequality report mentioned that inequalities in India are more than in many countries in the world. In 2021, a survey of 32 lacs families reveal that lower 50% family income was increasing since 1995 but declined by 50% in 2021 in comparison to 2015-16, whereas the richest 20% income increased by 39 %. The benefit of growth reached to the richest only in India. The average income of Rs. 50,000 per year among lower 50% people has been observed whereas top 1% average income is 42 lacs.
To increase GDP we must have demand for goods and services by the people who have higher MPC (marginal propensity to consume). There is a strong case of redistribution of income and wealth.
It is pertinent to mention that inequalities cause tension, discontent, corruption and crime. It leads to a decline in sense of belonging. We should make honest efforts for justice, equality and unity in India which is possible only by redistribution of income and wealth through a concrete plan of action including tax reforms. We have to write on the blank sheet for making the efforts to fill the empty glasses for the development of India.
We have to create faith in the fundamentals of the Indian economy by adopting the user-pay principle so that the hopes of the stakeholders are not belied. Indian economy can be made consumer-friendly by adopting the NAW (Need, Affordability and Worth) approach of marketing with a focus on the need-based priorities in choices of all kinds. Atmanirbharta is a necessary and sufficient condition for sustainable development of an economy and its people by keeping a check on greed which is the villain for all. It is pertinent to mention that very little for middle class that too indirect in the proposals including searching opportunities outside India as e-passport facilities is motivating.
Exclusive Interview of DR M M Goel :
Let Azadi Ka Amrit Mahotsav turn into Sunheri Bharat with commitment and honesty of purpose by all of us as consumers, producers, distributors, traders and the entire government machinery as street SMART (simple, moral, action-oriented, responsive and transparent) Indian. We have to be focused on the future without being trapped in the narratives of the past by misusing the western economic thoughts and replacing them with the Needonomics School of Thought as an idea of India. Let us be ready for the next reforms in the Knowledge economy of Bharat. The budget 2022-23 if in tune with the theme of the Economic Survey 21-22 ‘Art and Science of Policymaking under conditions of Extreme Uncertainties’ for adopting the Needonomics School of Thought for Swarnim Bharat as knowledge economy to be pandemic proof.
Note : The writer is Vice-Chancellor Starex University, Gurugram and Founder Needonomics School of Thought www.starexuniversity.com