My book Pt Deen Dayal Upadhyaya's Roadmap for India outlines the purpose and principles of an economic policy. As there was mixed and often confusing opinions on Budget 2016, I have used principles outlined by Pt Deen Dayal to evaluate the budget.
Purpose of any economic policy is to provide a life of dignity to every citizen. A close look at India's macro environment will reveal the following
1) Corporate or the business sector has benefited from the falling prices of commodities. With lower input costs and relatively stable inflation, profits are on the rise. Profits from the last two years are being used to address debt and improving balance sheets. Corporates are not re-investing their profits. They claim that both world and domestic demand is flat which can be well served by their current capacity.
2) On the consumer side, there is a big divide. Employed salaried class has benefitted from lowering interest rates leading to lower EMIs and a relatively stable inflation. Farmers on the other hand have seen two successive droughts and unusual weather conditions that have left them in distress. Lack of income has curtailed their purchasing power. The biggest domestic market for corporates in India is under stress.
As Pt Deen Dayal emphasised - "A prosperous economy flows from a prosperous agriculture". Increasing farm incomes will create the biggest domestic economy for corporates. Creating a sizeable domestic economy is the best insurance in a stressed global environment.
Budget 2016 is bold as it has only one intent - fix agriculture to kick start an economy. It focusses on providing a life of dignity to 60% of India which works in the agriculture sector. It will end up creating one of biggest markets in the world. There is enough and more money in the budget to transform every aspect of agriculture - from soil to water, from power to pesticides, from harvesting to storage, from online marketplace to insurance.
Next comes job creation or what Pt Deen Dayal calls 'Total Employment'. Three big job creating proposals are in the budget
1) Infrastructure investment is one of the fastest means of job creation. Budget 2016 along with the Railway budget sets a roadmap of overhauling India's infrastructure. The generous outlay of funds will not only create jobs but will create a platform for future growth
2) Re-designed MNREGA - An effective and leak proof MNREGA will be a monumental step towards providing Total Employment
3) Skill India / Start Up India - Skilling the population of India and then backing them up with support to start their own business via Mudra schemes will accelerate the process of job creation in India.
Lastly comes de-centralisation. Pt Deen Dayal said that Democracy means De-centralization. You need to empower institutions at ground level. Budget 2016 does just that by providing gram panchayats with a budget of their own to plan their development.
Budget 2016 is neither capitalist or socialist in nature, it is humanist. Its aims to provide a life of dignity for every citizen , a viable domestic market for corporates and laying the foundation of a strong economy.
In my assessment, Budget 2016 is a fitting tribute to Pt Deen Dayal Upadhyaya on his 100th birth anniversary.
Purpose of any economic policy is to provide a life of dignity to every citizen. A close look at India's macro environment will reveal the following
1) Corporate or the business sector has benefited from the falling prices of commodities. With lower input costs and relatively stable inflation, profits are on the rise. Profits from the last two years are being used to address debt and improving balance sheets. Corporates are not re-investing their profits. They claim that both world and domestic demand is flat which can be well served by their current capacity.
2) On the consumer side, there is a big divide. Employed salaried class has benefitted from lowering interest rates leading to lower EMIs and a relatively stable inflation. Farmers on the other hand have seen two successive droughts and unusual weather conditions that have left them in distress. Lack of income has curtailed their purchasing power. The biggest domestic market for corporates in India is under stress.
As Pt Deen Dayal emphasised - "A prosperous economy flows from a prosperous agriculture". Increasing farm incomes will create the biggest domestic economy for corporates. Creating a sizeable domestic economy is the best insurance in a stressed global environment.
Budget 2016 is bold as it has only one intent - fix agriculture to kick start an economy. It focusses on providing a life of dignity to 60% of India which works in the agriculture sector. It will end up creating one of biggest markets in the world. There is enough and more money in the budget to transform every aspect of agriculture - from soil to water, from power to pesticides, from harvesting to storage, from online marketplace to insurance.
Next comes job creation or what Pt Deen Dayal calls 'Total Employment'. Three big job creating proposals are in the budget
1) Infrastructure investment is one of the fastest means of job creation. Budget 2016 along with the Railway budget sets a roadmap of overhauling India's infrastructure. The generous outlay of funds will not only create jobs but will create a platform for future growth
2) Re-designed MNREGA - An effective and leak proof MNREGA will be a monumental step towards providing Total Employment
3) Skill India / Start Up India - Skilling the population of India and then backing them up with support to start their own business via Mudra schemes will accelerate the process of job creation in India.
Lastly comes de-centralisation. Pt Deen Dayal said that Democracy means De-centralization. You need to empower institutions at ground level. Budget 2016 does just that by providing gram panchayats with a budget of their own to plan their development.
Budget 2016 is neither capitalist or socialist in nature, it is humanist. Its aims to provide a life of dignity for every citizen , a viable domestic market for corporates and laying the foundation of a strong economy.
In my assessment, Budget 2016 is a fitting tribute to Pt Deen Dayal Upadhyaya on his 100th birth anniversary.
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