Bal­anc­ing Growth with Fis­cal Pru­dence to Boost Con­fi­dence of Stake­hold­ers

Ini­tia­tives out­lined are com­pre­hen­sive and ad­dress all seg­ments of the econ­omy; Bud­get also un­der­scores con­ti­nu­ity in the govt’s eco­nomic pol­icy ap­proach

The Economic Times - - Front Page -

The hall­marks of the 2017-18 Bud­get are pri­ori­tis­ing in­vest­ment ex­pen­di­ture, fo­cus­ing on in­clu­sive growth, and work­ing within a pru­dent fis­cal frame­work. The ini­tia­tives out­lined in the Bud­get are com­pre­hen­sive and ad­dress all seg­ments of the econ­omy. At the same time, it un­der­scores con­ti­nu­ity in the gov­ern­ment’s eco­nomic pol­icy ap­proach.

There are nu­mer­ous ini­tia­tives for the ru­ral econ­omy and farm­ers. The gov­ern­ment has set a tar­get of lift­ing 10 mil­lion house­holds and 50,000 pan­chay­ats out of poverty by 2019. Within this, the Bud­get has cov­ered crit­i­cal ar­eas like ru­ral hous­ing, vil­lage elec­tri­fi­ca­tion, san­i­ta­tion, liveli­hoods, ac­cess to credit, com­put­er­i­sa­tion of co­op­er­a­tive credit so­ci­eties, crop in­sur­ance, and stream­lin­ing the marketing of agri­cul­tural pro­duce.

The Bud­get has high­lighted in­fra­struc­ture de­vel­op­ment as a fo­cus area. This covers high­ways, ru­ral roads, and rail­ways. These in­vest­ments, aimed at im­prov­ing con­nec­tiv­ity through a multi-modal network, will not only have a ben­e­fi­cial direct im­pact on growth, but will also boost the long-term pro­duc­tiv­ity of the econ­omy. The gov­ern­ment is also propos­ing to an­nounce a new metro rail pol­icy. Fo­cus on af­ford­able hous­ing will im­prove liv­ing stan­dards in both ur­ban and ru­ral ar­eas and will have a pos­i­tive im­pact on the con­struc­tion sec­tor. All these ini­tia­tives will have a cas­cad­ing pos­i­tive im­pact on growth given their link­ages to other sec­tors; will boost em­ploy­ment; and will make growth more in­clu­sive.

The Bud­get con­tin­ues the fo­cus on ease of do­ing busi­ness, with the pro­posed dis­man­tling of the For­eign In­vest­ment Pro­mo­tion Board. The pro­posed cre­ation of an in­te­grated pub­lic sec­tor oil ma­jor will lever­age the strengths of our pub­lic sec­tor en­ter­prises. List­ing of more pub­lic sec­tor en­ter­prises will high­light their value and im­prove their com­pet­i­tive­ness.

There are mul­ti­ple ini­tia­tives for the fi­nan­cial sec­tor. These in­clude con­tin­ued em­pha­sis on dig­i­tal pay­ments and cre­ation of a new pay­ments reg­u­la­tory board within the RBI. The thrust on dig­i­tal trans­ac­tions will in­crease the size of the for­mal econ­omy.

The Bud­get ar­tic­u­lated a wel­come fo­cus on im­prov­ing the delivery of pub­lic ser­vices, and measuring out­comes to en­hance trans­parency. The shift to ac­crual-based fi­nan­cial state­ments for rail­ways by March 2019 is an­other im­por­tant step for com­pre­hen­sive trans­parency in pub­lic fi­nances. As ex­pected, the Bud­get re-em­pha­sised the im­por­tance of im­proved tax com­pli­ance. In ad­di­tion to the roll­out of the goods and ser­vices tax, the lim­its on cash trans­ac­tions and the pro­pos­als for po­lit­i­cal fund­ing should im­prove com­pli­ance and trans­parency.

Gov­ern­ment has set a tar­get of lift­ing 10 mil­lion house­holds and 50,000 pan­chay­ats out of poverty by 2019

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