By Sudheendra Raj Bajpai
Budget 2015-16 was a positive articulation for the forthcoming year and drove home the point that it was not just a statement of ‘revenues and expenditures’, but also the vision of the government.
The year gone by has been a challenging one; many developed economies were not able to shrug off deflation and shrinkage; still India has managed to fare reasonably well in terms of macro-economic performance.
It is therefore critical that Budget 2016-17 be thought through and pragmatic.
My top 5 wish list takes off from Budget 2015-16 and builds upon the to need to take the next level of initiatives.
- Expedite innovation: It is the buzz word all around and I want to begin from that. The Atal Innovation Mission created under the aegis of the Niti Ayog should be expedited with a sense of urgency and its terms of reference should be formulated quickly to foster a culture of innovation and R&D in the country. The required provisions should be clearly spelt out in the budget.
- Nip wilful defaulters in the bud: Wilful defaults are estimated to comprise almost 35 percent of bank NPAs which have touched an astronomical figure of approximately Rs 1.7 lakh crore. They are a bigger menace than black money. Strict provisions should be proposed to penalize defaulters including recourse to non-attached assets.
- Reduce transaction costs of financial inclusion: The Digital India initiative should be employed to bring digital payment facilitators on board to achieve this objective. All subsidy disbursement, especially, should be done through electronic direct benefit transfer mechanism. The budget should lay the target and roadmap to reduce cash transactions in the economy over the next decade; say from the present 90 per cent to 50 per cent going forward.
- Partnership pitch to States: The budget should formalize the financial roadmap to bring states on board for effective implementation of the Smart Cities project. In addition, a central repository should be created to capture the learning acquired during implementing of smart city projects from where late-comers and others can access information and avoid the mistakes made by early starters.
- Facilitate primary/secondary transactions in infrastructure: Equity today is the biggest challenge in reviving private investment in infrastructure projects. Almost all players have stressed on balance sheets and are over-leveraged. The budget should make provisions to create an enabling environment to facilitate release of equity trapped in stuck projects. A fundamental strengthening is also needed at the institutional and project level to achieve success in private sector infrastructure bonds – for it is not just about raising money, but also about repaying it with interest from the investment.
The list can be long and varied as the subject is complex and very broad-based. I believe the above suggestions will make a significant difference in making India a next destination nation.
(The writer is student at ISB, Hyderabad. Views are personal)