“The Budget is neither a big bang nor populist; it is prudent, modest and well-intentioned. But actions must match intentions and implementation is the key. Jobs will come only out of growth spurred by new investments,” said C Rangarajan, former Governor of RBI.
Dr Rangarajan, also the Chancellor of ICFAI University Hyderabad, was a part of the panel that discussed the Union Budget recently. The other members on the panel were M Govinda Rao, Emeritus Professor, National Institute of Public Finance and Policy, New Delhi and BVR Mohan Reddy, Founder and Executive Chairman, Cyient Limited.
Rangarajan said that with the increasing availability of currency the adverse impact of demonetisation would wear off, but sectors like real estate will continue to feel the impact. He added that the Budget had been prudent in keeping the fiscal deficit at 3.2 per cent. He welcomed the Finance Minister’s stand on not raising the exemption limit for income tax. He also appreciated the measures taken towards curbing black money, reforming the political funding system and broadening the scope of digital transactions, and said that the indirect tax structure could have been cleaned in accordance with the consensus reached in GST council.
Govinda Rao said that the Budget cannot be considered a panacea for all the ills of the economy. The Indian economy, which was showing signs of slowdown even before demonetisation, is facing a tough macro-environment with global challenges, slowing of emerging economies and growing protectionism. The average quarterly investments for December 2016 dropped to ₹1.25 trillion from an average of ₹2.36 trillion during the previous nine quarters. Rao opined that the Budget was good in parts, but has little to revive the economy, which is much needed given the current challenges that the macro-environment is facing.
BVR Mohan Reddy said that the Budget was pragmatic and high on intent. He added that transformational reforms like GST, demonetisation, bankruptcy code and Aadhar bill would have a positive long-term impact on the economy, which is facing challenges due to changing global scenario. With millions of youngsters joining the workforce, it is necessary to have good quality education, which is possible by providing more autonomy to institutes.
He also said that innovation was important to create jobs. He lauded initiatives like Swayam, which provides online courses for students; Sankalp, a programme to provide market-relevant training to youth; and Digi Gaon to provide telemedicine, education, and skills through digital technology. Reddy said that the tax reduction for MSMEs and tax concession for start-ups would boost the entrepreneurial activity.
Presiding over the event, J Mahender Reddy, Vice Chancellor, ICFAI University, said that implementation was crucial and that international environment and protectionism could be the main challenges the country would face. The event was attended by students and faculty.