FATE (Future Anticipated Trends & Events) Analysis of Union Budget 2023-24
By Professor Madan Mohan Goel
To look back in 2022-23 and look forward to 2023-24 is the need of the time for the stakeholders as consumers, producers, distributors, traders and politicians (both in power and opposition). To discover needo-happiness for the stakeholders in the financial year 2023-24 is the objective of this article. This calls for conducting a FATE (Future Anticipated Trends & Events) analysis of the union budget 2023-24. To fix the socio-economic problems in the Indian economy, we need healthy discussions among stakeholders including politicians and policymakers. We require a pragmatic approach with practical solutions (no quick fixes).
Being a needonomist, I am expectative of miracles in the thinking process of all the stakeholders including FM. We must avoid the traps of the opposition leaders to befool the budget to be called populist as preparation for the 2024 elections.
To set the tone of Swarnim Bharat towards 2047, we have to introspect the theme of the budget 2023-24 for identifying the priorities in various sectors of the economy. We must be hopeful for the people and the Indian economy to perform with strengths, weaknesses, opportunities and challenges. To change our economy in Swarnim Bharat, we must change ourselves as consumers, producers, distributors and traders by adopting needo-consumption, needo-production, needo-distribution and needo-trade.
It is to be noted that most of the expenditure is fixed and Finance Minister (FM) Mrs Nirmala Sitaraman can do very little. 2/3rd of 100 is spent On debt servicing, defence, transfer to States, subsidies and pensions. By adding salary cost it becomes 3/4th of the budget. The total budget size conveys an exercise to allocate a relatively small 25 per cent of that by the FM. Borrowings are to be monitored. Capital expenditure enhancement conveys better quality expenditure for infrastructure. The funding strategy to finance the budget falls in the domain of the FM.FRBM Act calls for the moral-suasive fiscal path. We should expect a big macro picture beyond the numbers.
To expect needo-prosperity in 2023-24, FM should work without worries and remain fearless of the fear of fiscal crisis as fiscal deficit, revenue deficit, primary deficit and interest payments. To break with the past practices and make good fortune in 2023-24, we must introspect on the utilization of allocations based on needo-consumption and avoid conspicuous consumption.
To burn the effigy of Ravans (villains) in 2023-24, we must adopt zero tolerance against corruption, terrorism, discrimination and inequalities in education and health for needo-wealth, needo-health and needo-happiness. We need policy measures for showing the door to the inefficient in the operational system of the economy. We require deep cleaning and decluttering of our homes for creating space for the welcoming financial year.
We must avoid making mistakes which are obvious if experimenting with new ideas, trying new things, learning, living and pushing up on the ladder with morality, opulence, victory and empowerment (MOVE).
FM has to prove her credibility with the framework of the budgetary process, which is essential for fiscal marketing to create faith and confidence. It is a tightrope walk for FM for fiscal expansion and fiscal prudence. The desire of the FRBM Act to lower fiscal deficit (FD) to 4.5 per cent of GDP by 2025-26 is a distant dream due to obvious reasons. To expand the social security net, we certainly need to deploy finances. To provide employment, we need measures more than monetization of assets and improve effectiveness in targeted public expenditure.
To upgrade education envisioned in National Education Policy (NEP) 2020 for ensuring needo-employment and needo-entrepreneurship. We require needo-education as Higher Order Thinking Skills (HOTS) with creativity, innovation and critical thinking along with human values and ethics. The FM must explain the use of education cess collected from the income taxpayers for effective implementation of NEP with many challenges including financing the States.
The political leadership both in power and opposition should have empathy with the youth who are the victim of under-employment more than unemployment and are compelled to work for lower wages even in jobs for highly educated. It is pertinent to mention that many of such candidates are unemployable as useless and careless. The challenge is how to convert careless into careful and useless to useful manpower. There is a strong case for needo-data for unemployment which is based on sample surveys by the agencies responsible for data and conceals more than it reveals.
There is a strong case for enhancing the income tax exemption limit and being linked with Consumer Price Index (CPI) for industrial workers (IW) which is the basis for additional dearness allowance (ADA). At least ADA should have been exempted which is the so-called compensation for inflation for employees of the Government at all levels. There is no logic and rationale to tax house rent allowance received by the employees owning their houses. There is no justification for taxing the fixed medical allowance for taking preventive, promotive and curative health by the employees of all cadres and creeds in India. To expect fortune for income taxpayers, we need to enhance the standard deduction to be one lakh to keep pace with inflation and induced expenses.
To improve the affordability of health insurance for the middle class who are converting into poor, we have to lower the GST rate of 18 per cent on premiums. It is interesting to note that Ayusman Bharat takes care of the rural and urban poor.
To create serious opportunities for improving the ease of living of the people of India, we need system innovation in place of technology innovation with consumer-centric reforms with incentives to 28 States and 9 UTs.
To promote pro-poor economic growth with ample opportunities for employment, there is a strong case for the Khadi and Village Industries Commission (KVIC) to be converted into an MNC- the best tribute to Mahatma Gandhi who if alive today could have internationalized Khadi for the globalization of Indianization. This is necessary and sufficient to revive the struggling MSME sector. We have to incentivize labour-intensive sectors for providing employment opportunities.
The top priority needs to be given for ‘rain harvesting’ which can solve the problem of floods and waterlogging on the one hand and droughts and declining water tables on the other. Let us learn to share river water also.
We need a new orientation to the defence budget as a separate budget. It is to be noted that appropriate expenditure on defence is an engine of economic growth via peace which is necessarily a basic infrastructure. There is a strong case for enhancing defence expenditure which is justified to face the challenges caused by internal threats and terrorism of various kinds including unemployment and suicides by farmers. The only practical solution to these problems is to make military services compulsory for five years for the youth which will bring discipline to the Indian economy in one sense or the other. The domain of military activities will have to be increased to include the agricultural industry.
There is a strong case for coordination between fiscal policy, monetary policy, industrial policy and foreign trade policy for the acceleration of growth in various sectors of the Indian economy.
To understand, analyze and interpret the intricacies involved in adopting inflation targeting in India, FM needs to be faithful to the intention of the will of people, use the wisdom of economists from every nook and corner of India and adopt economy in the execution of the policies and programmes.
The financial year from April 01 (Fools Day) – deserve to be changed. It needs to start from July 01 to June 30 if we trust the Indian economy to be a knowledge economy or agricultural economy wherein the year starts on July 01.
It is believed by this writer that if the rate of increase in the capital expenditure is faster, it shows the strengthening of infrastructure. The increased revenue expenditure is inevitable. The real estate sector has to be given infrastructure status as it has a good employment multiplier and provides housing to the people.
The improvements in behaviour of the stakeholders including consumers, producers, distributors, traders and the Governments at all levels calls for gita-based needonomics (economics of needs) as the requirement of 2023-24 for preparing the economy towards Swarnim Bharat in 2047.
*The writer is Former Vice-Chancellor and Known as Founder Needonomics School of Thought and superannuated from Kurukshetra University, Kurukshetra.