Viewpoint: A Challenging Budget

17 JAN,2021 | MEDC


 

The pandemic has upset all equations globally. The forthcoming Union Budget to be presented will need to strike a fine balance in choosing between lives vs. livelihoods, and fiscal prudence vs. financial largesse. Amongst other things, Covid has taught us the importance of developing a world-class healthcare system, one which does not discriminate between the rich and the poor, and which can be truly beneficial to the masses. An enhanced spending on healthcare (including technological upgradation) is the need of the hour, and no compromise should be made therein. Education is another area where the budget needs to focus. Covid has clearly brought out the digital divide between the haves and the have-nots in our society, and that needs to be urgently bridged if our education system is to be truly inclusive. If adequate steps are not taken right away in this regard, we risk severely damaging our demographic dividend. Rural areas, as a whole, tend to be disadvantaged as far as digital technologies are concerned, and the budget is an appropriate place to address their long-standing legitimate grievances. If India is to become globally competitive, the budget needs to address land and labour reforms. The strategic removal of residual sector caps on foreign funds can help enhance India’s attractiveness as a global investment destination. If India is to compete with China in the manufacturing sphere, there are certain tax considerations which need to be addressed. In particular, compliance issues pertaining to GST need to be looked into, and a win-win situation (to the extent possible) for all stakeholders should be arrived at. This may entail tweaking the entire fiscal system, but it is worth serious consideration. In a world of work from home and social distancing, access to the right technology is paramount. The budget needs to incentivize digitization throughout the economy, make cybersecurity a national priority, and harness the full potential of artificial intelligence, cloud computing, blockchain, the internet of things, and other emerging technologies. Both public and private sector organizations should be suitably incentivized to invest in such knowhow to enhance their competitiveness as well as boost the ease of doing business in the country. It was the rural economy that essentially saw us through Covid, and so special attention should be paid to agricultural grievances. Value chains should be strengthened by ensuring adequate allocation for agrarian infrastructure including storage, logistics and distribution centres. Diverse job opportunities should be created for rural youth in agro-businesses, and the required skilling imparted to them to promotetheir lifelong employability. More private enterprises should be incentivized to invest in rural areas. The budget remains an important vehicle for bridging the urban-rural divide, and getting our economy back on track. 

*Photo Credit: Google

 

 

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