25 Jan 2020 17:44 IST

The India growth story: Is the best behind us?

This Budget must reverse declining growth by upping spend on infrastructure, connectivity and MSMEs

‘Reverse the trends!’ has to be the mantra as India heads into an enigmatic Budget 2020. Economic indicators are down, a critical social issue is plaguing the nation and most of the promise and oomph that BJP started its second term with have fizzled out, while new initiatives have been met with serious scepticism. With GST and demonetisation casting a pall over India’s growth trajectory and changing its course in more ways than anticipated, the government is tasked with the challenge of revising the plot to forge stronger growth and, as an Indian millennial, that is what I would primarily expect from our Budget.

The government estimated a huge rise in revenue across sources for this fiscal year, and this needs to be reflected in an investment boost for MSMEs. One of the reasons for the slowdown has been illiquidity triggered by demonetisation and this has largely hit Tier-2 and Tier-3 cities and towns more than the metros. Policies and measures will have to stimulate greater circulation in the economy.

Strengthening financial institutions and capital infusion into the market would end the spending freeze and reverse the declining trend. This has to be coupled with an increased focus on infrastructure. Some of the grand projects proposed by the preceding government do not seem to be taking shape as promised but there is a strong need to focus on building stronger connectivity. With India’s rising middle-class and a resultant rise in consumer spending, there is very high potential trapped in the logistics and transportation sector. Commitment to increased connectivity and robust infrastructure would be key in this Budget.

Digital infrastructure and cyber security are other aspects I wish to see gain traction. Government initiatives such as Digital India and measures towards greater financial inclusion and better surveillance need to be supported through better digital infrastructure and government spending.

As a student, it is disheartening to see government drastically reduce spending on the education sector. With the worsening unemployment scenario, and with organisations preparing for a lean economy, upping the allocations for skill-building and reinforcing educational infrastructure should be high up on the Centre’s agenda.

The Budget must reflect its commitment to employment generation through policies that encourage MNCs to hire Indian talent and incentivise them to focus on innovation by enabling tax provisions and government policies.

(The writer is a student at the Indian School of Business.)

Recommended for you