Opposition parties have urged the Centre and the Election Commission to postpone the Union Budget until after the conclusion of Assembly polls in five states, but industry experts and academics believe government spending is needed immediately to mitigate pains caused by the Centre's demonetisation decision. The experts have identified agriculture, rural infrastructure and energy as the three sectors which require immediate attention.
This comes at a time when even President Pranab Mukherjee stressed upon the need to alleviate the sufferings of the poor following demonetisation.
Economist professor Venkatesh Athreya, of MS Swaminathan Research Foundation, told Firstpost, "The government can do a lot to mitigate the sufferings of the poor people of India even if it doesn't advance the budget to 1 February. For instance, what prevents them from spending more money on schemes such as MGNREGA, which is seen as an important lifeline to the poor?" he asks.
Adding that demonetisation has collapsed the banking system, which hasn't been able to lend money to the agriculture sector for the last two months, Athreya said there is an immediate need to spend money in agriculture, rural infrastructure and energy. He also says that if the government had any real intentions of helping the poor, it would have expanded investments in these sectors without getting into a tussle with the Opposition over the budget date.
Mukherjee, while addressing governors and lieutenant governors on 5 January, had said that India has to speed up implementation of projects and economic policies faster than the pace that was seen in the earlier financial years, to provide the poor with the relief they were craving.
"Demonetisation, while immobilising black money and fighting corruption, may lead to temporary slowdown of the economy," he said.
He had also appreciated the transition in approach towards poverty alleviation from entitlement to entrepreunership, albeit with a caution that he is not too sure that the poor can wait that long and asserted that they need to get succour "here and now".
A study published by Vox CEPR's Policy Portal in 2010 had said that the global downturn in the last decade of the millennium had resulted in an addition of 1.4 million to 2 million poor people in Bangladesh and Phillipines. Similar adversities in India too are feared on the face of the temporary economic slump predicted by Mukherjee.
His address also underlined the real challenges the country is facing and the need to deal with them in a timely manner, which was in contrast to the Opposition's demand to postpone the budget.
Industry experts expect more pro-poor measures will be announced, specifically in three key sectors: Agriculture, infrastructure and energy. Bimal Jain, market watcher and chairman of the indirect taxes committee of the Punjab Haryana and Delhi Chambers of Commerce, told Firstpost that the demand to postpone the budget does not seem to be a legitimate one, especially at a time when the economy is struggling hard to cope with the effects of the temporary slump caused by demonetisation.
"The country needs major decisions immediately to subsidise energy and relax agricultural loans.We need to invest more in infrastructure, to mitigate the pains of the poor and also to boost up the economy. Without the budget, these decisions cannot be taken," he said.
He also said that the budgetary decisions are meant for an pan-Indian impact. Hence, the musing that it will influence elections in Uttar Pradesh, does not hold ground. He also believes that postponing the budget will only cause further delays in handing over benefits to the people, as implementation of the schemes will require time.
For full coverage of Union Budget 2017 click here.
Published Date: Jan 07, 2017 21:24 PM | Updated Date: Jan 14, 2017 20:15 PM