With the Union Budget just a few weeks away, Firstpost spoke to Dr Shubhada Rao, President and Chief Economist, Yes Bank Ltd. The interview covered various issues right from budget expectations to growth, possible election giveaways, twin deficits, subsidies and reforms.
According to Rao, the government should look at utilising its land bank to bridge the fiscal deficit. For instance, the huge land banks with railways could be monetised, perhaps with a lease arrangement for setting up plants or green field projects or projects that have linkages with railways them selves.
Another important point is enhancing export performance and curbing wasteful imports like that of gold. Imports should be more production-linked ones.
She said divestment has been used to bridge the fiscal gap, when in doubt. But expenditure management was more important in the Indian context. She expects a certain degree of performance in this budget, especially in terms of bringing back fiscal discipline and fiscal consolidation, creating an enabling environment for investments to pick up.
The underlying clear fundamental for the government, however, should be to concentrate on domestic macro-economic fundamentals and everything else would fall in place subsequently. Rao also said she looks forward to the budget day every year, as we get a free flowing thought process from the finance minister, not only through action but through numbers also.