As an MBA student, an aspirational youngster and a responsible citizen, I have more than a few expectations of the 2019 interim budget. The past few election results were not in the favour of the current government, so there is a possibility that populist measures may be included in this budget. If history is an accurate guide, we know that many governments have used interim budgets as a political tool to woo voters. However, one cannot overlook the global and domestic economic trends that demand a more reformative and policy-oriented budget for India.
My expectations of this budget are derived from my understanding of the gap between the global and domestic economic scenario.
Though increased government expenditure may boost spending, it may also crowd out the private investments because of an increase in interest rates. As a result, I hope the government will adhere to a fiscal deficit target of 3.1 per cent for FY 2019-20. This could enable the government to reduce its debt to GDP ratio to 46.7 per cent in FY 2019-20, as recommended by the NK Singh Committee.
The populist measure of wooing rural voters through farm loan waivers has backfired on the economic front. Instead, the government must focus on measures such as building irrigation facilities, providing access to technology and alternative employment opportunities for farmers during non-harvesting seasons. The distressed agricultural sector needs more such strategies and allocation of funds.
The theory of demographic transition, which suggests that India is in a place where it can reap benefits from the demographic dividend, must be taken with a pinch of salt. Job creation and lack of skill training are problems that need to be fixed in parallel.
Job creation in the organised sector is another challenge that needs to be overcome. The NDA government’s Skill India mission has not been as effective as promoted. Once again, the focus should be on long-term skill training and not the short-term, which is one of the main reasons why only 8 per cent of the trained candidates are placed. I expect the government to make reforms to the Skill India programme through higher budgetary allocations and a focus on developing long-term skills.
In 2018, India granted over 12,000 patents, compared to the 3,38,000 patents the US granted. The government needs to encourage and incentivise private players to be more innovative. equip people with the right kind of ecosystem. No country can bring in reforms without transforming its education system, and India is no exception. It must provide educational institutions with the right kind of ecosystem.
As per the law, the interim budget may or may not have a distinct Part B. Earlier, owing to political morality, very few changes were made on the revenue side of the budget. I also expect more benefits for the salaried class — ‘the most honest taxpayers of the country’. I would like to add that the government could reduce the corporate tax to 25 per cent for all companies, as mentioned in the second budget of this government.
(The writer is a final year MBA student at Flame University.)