Budget to tackle rural distress, job creation and investments
NEW DELHI: The government on Wednesday signalled that the union budget for 2018-19 would include solutions for vexed problems such as rural distress, jobs and revival of private investments.
These immediate challenges to the economy topped the extensive discussion that Prime Minister Narendra Modi and senior cabinet colleagues had on Wednesday with economists and sector experts from across the country.
Rajiv Kumar, vice-chairman of federal policy think tank Niti Aayog, which organised the discussion, said at a briefing that many experts suggested measures for raising farm productivity, reduction in cost of farming and improvement in market access for farmers.
Experts also suggested that fresh capital infusion into public sector banks should be followed by reforms so that instances of lending decisions going wrong come down. Last week, the government had informed Parliament of its decision to issue ₹80,000 crore worth of recapitalisation bonds to raise resources for the capital infusion plan. The idea is to spend a total of ₹2.11 lakh crore to strengthen banks so that they are able to finance projects.
“The suggestions from experts included those for the forthcoming budget as well as for longer term structural reforms,” said Kumar. He added that Niti Aayog will soon come out with a new way of monitoring employment based on high-frequency data.
He said findings of a task force set up by Niti Aayog to examine employment data was “startling” and that they suggested a “better picture on the jobs front than what people thought.” He also said it was pointed out that educated unemployment among young people in the country may be as high as 20%.
A stronger exports-driven strategy was also discussed at the meeting. “There is a big opportunity here for India. And we need better government capability to target sectors which are needed to expand exports,” he said.
The idea of broad-based consultation was to set a new economic policy for the future as growth is estimated to pick up momentum after the shake-up from structural reforms.
The outcome of Wednesday’s discussions on key themes, including macroeconomic balances, agriculture and rural development, urban development, infrastructure and connectivity, employment, manufacturing, exports, health and education, could get echoed in the Union Budget for 2018-19, the last full budget of the NDA regime before the 2019 elections. The new social and economic goals will also form the pillars of Modi’s blueprint for a “New India”.
Fnance minister Arun Jaitley, transportation minister Nitin Gadkari and agriculture minister Radha Mohan Singh and secretaries of various departments, were also present at the meeting, said Kumar.
According to the latest forecast from Central Statistics Office (CSO), the economy expanded at 6% in the six months ended 30 September and will complete FY18 with a 6.5% growth, implying a 7% expansion in the second half ending 31 March.
According to consulting firm EY, there are clear signs that GDP growth numbers might progressively climb up with the effects of demonetisation and transition hiccups of goods and services tax (GST) behind us.