Government should introduce national credit cards for individuals, businesses

PROF. Dr D.V.G. KRISHNA, Economics professor

Prices of petroleum products should be stabilised across all states by modifying the GST rates. Credit guarantee should be offered to industrialists and exporters.

Anational credit card should be instituted. The Indian economy is racing to become a $5 trillion economy by the year 2024-25. It is, however, passing through a temporary slowdown phase mainly attributable to international economic trends. The growth rate fell below what was originally predicted but is still better than several countries. At this juncture, the Union Budget should not be merely an exercise of balancing receipts and expenditure. It should be aimed at arresting the slowdown of economic growth, promoting employment and welfare and keeping deficit under check. India's economic growth has decelerated since mid-2018, with real GDP growth slipping from nearly 8 per cent to 5 per cent in the second quarter (April-June) of 2019. It further slipped to 4.5 per cent in July-September quarter, mainly due to poor showing by manufacturing and construction sectors. As per the first advance estimates of the national income released by the National Statistical Office (NSO), the manufacturing sector output growth will decelerate to 2 per cent in 2019-20, down from 6.9 per cent in the previous financial year. Likewise, the construction sector growth is estimated at 3.2 per cent as against 8.7 per cent in 2018-19. The NSO data further revealed that deceleration in growth will also be witnessed in other key segments - agriculture, electricity, hotel and transport sector, financial, real estate, and professional services. India's JulySeptember 2019 (Q2) GDP growth rate fell to 4.5 per cent, the lowest in over six years, compared with 7.1 per cent in the same quarter of 2018-19. The low growth rate was mainly on account of a weak manufacturing sector, falling consumer demand and private investment, and a drop in exports due to global slowdown. The gross value added growth during Q2 stood at 4.3 per cent, against 4.9 per cent in April-June this year and 6.9 per cent in the September quarter last year. Gross fixed capital formation at current prices declined sharply to 1.02 per cent, compared with 11.8 per cent in the same quarter last year.

States should be mandated to bear a part of the cost of laying new railway lines in backward areas in their respective states. Entertainment of any sort — films, music and sports — should be heavily taxed. Minimum support price for food, oilseed and cash crops should be provided without fail and input subsidy should be given more liberally. There should be no income tax on income earned through pensions by senior citizens. Inflation, especially food inflation, should be strictly controlled. Prices of petroleum products should be stabilised across all states by modifying the GST rates accordingly. Credit guarantee should be offered to industrialists and exporters. A National Credit Card should be instituted. The ceiling limit could be `5,000 for each household and `10 lakh for every business. Loans to start ups should be sanctioned more liberally. Unemployment and underemployment should be curtailed. M. Phil., Ph.D. (Economics), Director & Professor, Ramnath Gulzarilal Kedia College