The Amrit Kaal and Union Budget 2023-24 | Panel Discussion | #TowardsAccountability #IMPRI Center for the Study of Finance and Economics (CSFE), IMPRI Impact and Policy Research Institute, New Delhi invites you to an IMPRI #WebPolicyTalk series: The State of Public Finance…
The Union Budget for 2023-24 has come at a time when the economy is ostentatiously doing well but is facing challenges both internally and externally. The unorganised sector is suffering due to the policies the government has been pursuing for some time. Externally, the war in Ukraine and the ongoing ‘New Cold War’ are adding to the problems. Both these challenges needed to be addressed in the Budget. Unfortunately, that is not in evidence.
Telling the truth to power is, of course, the job of journalists. But it used to be the case that the pre-Budget Economic Survey took pains to highlight challenges (near-term and structural) that policy and Budget outlay need to address. This year’s Survey has the unique distinction of brushing off two traditional responsibilities of the Survey: identifying constraints and making recommendations. Instead, it sings an erudite paean to India’s economic management over the last eight years and projects continued growth, even if the world economy slows down.
Focus has to shift from the automated large scale sector, to promotion of the rural economy and the small and micro sectors. The Union Budget 2023-24 is around the corner. A budget is expected to identify the issues facing the economy and society and try to provide solutions to them. This may involve continuing policies or changing them. The budget represents the priorities of the government – what gets more allocation and what gets less. Changes in priorities take time to show any impact, so many analysts say that budgets do not make a difference. But, given that the budget is the largest single economic event, it matters even if priorities remain unchanged.
For cities to develop it is essential that decision-making power is given to the local administration — holistic and sustainable city-specific development cannot happen in a top-down approach where the Centre or state decides. A prerequisite for development is uniformity in the governance structures from top to bottom. This is what Prime Minister Narendra Modi said while inaugurating a metro project in Mumbai on January 19. He called upon the people of Mumbai to vote for the Bharatiya Janata Party (BJP) in the municipal corporation elections, which are long overdue. He exhorted that the ‘triple engine’ governance model — the Centre, the state, and the Mumbai corporation — should be run directly or in partnership with the BJP for the development in the metro city.
The government affidavit filed on November 16 justified demonetization by claiming that it was a part of a bigger policy push to digitize and formalize the economy – in its view a beneficial step. The affidavit, in paragraph 15 justifies the decision to demonetize the large denomination currency notes by stating that it was a “well-considered decision” taken after “extensive consultation with the Reserve Bank of India (‘RBI’) and advanced preparation”. The implication is that if the decision was wrong, it is the RBI’s (the expert’s) fault.
Given the high share of its young population, India has a huge potential that is being wasted due to the inability of its policymakers to set the right policies. Potentially, many workers in the population can support the non-workers—the young and the elderly—and the economy can grow faster.