Budget creates the ground – now it’s time for these steps

Severe worthy proposals need to be followed up in order to bolster Indian economy

Dr. Palakh Jain and Aditi Jain | February 8, 2023


#economy   #finance ministry   #Budget  
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman addressing the press meet after presenting the budget in Parliament on February 1.
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman addressing the press meet after presenting the budget in Parliament on February 1.

On February 1, finance minister Nirmala Sitharaman announced the Union Budget. As Dr. Rajiv Kumar, the Pahle India Foundation chairman and former NITI Aayog vice chairman, succinctly summed up, “Budget 2023 is a consolidation of the gains over the years, and a positive step towards sustained economic growth and development for our country.” In this article, we aim to provide a few pointers which need to be taken into consideration while moving forward with the budget allocation.

Firstly, the budget was expected to focus on improving access to safe and affordable sanitation. However, there was no focus on sanitation and we agree that a lot of investment has gone in the past in developing the infrastructure of toilets. However, studies have repeatedly shown that there is a grave need to change the behavior of people toward increased usage of toilets. Hence, we expect that in the next year’s budget, there will be some allocation to the R&D of Nudge Economics which can act as a tool for bringing about a change in people’s attitudes towards increased usage of toilets.

Secondly, the announcement of R&D in the newly identified lab-grown diamond industry is a welcome move toward making India self-sufficient. The researchers in India can focus their attention on identifying similar industries, i.e., those industries in which India is import-dependent.

Thirdly, the income slab up to Rs 7 lakh has been exempted from any tax rate. We need to explore the enhancement of slab by Rs 5 lakh justified as per the increasing inflation in the country. With the increasing trend of shrinkflation across products and rising packaging costs, we need to relook at the justification of this slab. The middle class is happy, but the main questionremains unanswered; how is this Rs 2 lakh increase justified as per the inflation trends?

Fourthly, we appreciated the announcement of 500 waste-to-wealth plants in the Budget. However, what needs to be seen is the categories of waste tackled. There is a crisis looming across all kinds of waste – e-waste, metal waste, plastic, and whatnot. There is a need to prioritize amongst types of waste, and identify the most detrimental types, and focus investment allocated accordingly. A detailed cost-benefit analysis of these plants for different kinds of waste is needed for the optimal utilization of funds.

Fifthly, the current budget government has allocated resources to develop a comprehensive national digital infrastructure to facilitate EdTech-enabled learning. With a view of creating a digitally enabled economy, the Union Budget 2023 should have focused more on promoting digital infrastructure and services including measures such as promoting digital literacy and skills among citizens, setting up digital hubs to support innovation, and providing tax incentives for digital businesses. It was also expected that the government would allocate resources to develop a comprehensive national digital infrastructure to facilitate EdTech-enabled learning.

To make India a leader in green initiatives, the Union Budget 2023 should have focused on promoting green initiatives. This could include measures such as introducing incentives for renewable energy production and encouraging citizens to adopt green practices. India should invest in renewable energy sources such as solar, wind, and hydropower, to reduce its dependence on fossil fuels and to reduce its carbon footprint.

Lastly, the announcement of encouraging start-ups in rural India is worth appreciating. However, we need to ask whether we have the infrastructure in place in the rural areas for encouraging entrepreneurs. When the rural economy is struggling with the basic amenities, what provisions are in place for encouraging risk appetite among the rural citizens? We need to invest in Entrepreneurship Cells and credits for such entrepreneurs before embarking on this ambitious journey.

The government has announced several new initiatives aimed at bolstering the country's economy through the Union Budget. Overall, the Budget is expected to have a boosting impact on the Indian economy through measures such as increasing public spending, simplifying taxes, creating a better business environment, and promoting exports. It is likely to create jobs, reduce inequality, and promote economic growth.

Even though the budget focuses on improving the fiscal health of the government by reducing wasteful expenditure and improving revenue collections, we need to keep in mind that it is our duty to stay vigilant, always ensuring we’re pushing our government and the economy to its fullest potential, an economy for every citizen, every business and every society.

Dr. Palakh Jain is an Associate Professor at the School of Management, Bennett University, and a Senior Visiting Fellow at Pahle India Foundation. Aditi Jain, a certified Project Management Professional (PMP)®, is the Head of the International Relations and Corporate Outreach Office at Bennett University.

 

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