Press Release
Reetwika Mallick
The IMPRI Center for the Study of Finance and Economics (CSFE), IMPRI, Impact and Policy Research Institute, New Delhi, hosted an interactive panel discussion on the topic “Viksit Bharat – Developed India @2047 and Union Budget 2024-25” on 24th July 2024, under IMPRI 5th Annual Series of Thematic Deliberations and Analysis of Interim Union Budget 2024-25, as part of IMPRI #WebPolicyTalk.
The chair for the session, Prof Nilanjan Banik, Professor and Program Director (BA, Economics and Finance), Mahindra University, Hyderabad; Visiting Consultant, IMPRI, commenced the session by laying out the Indian economic scenario. The strengths of the Indian economy in terms of consistent growth of around 7% in the post-pandemic period and a decline in the current account and fiscal deficits were discussed by Prof. Banik on the opening remarks for the session.
The tone of the session was set by not only analyzing the domestic economic drivers but also the external indicators of economic health. Export in the service sector as the crucial pillar, maintaining the balance of payment along with creating employment opportunities were highlighted by Prof. Banik. Despite strong and resilient growth, Indian sectors that require intervention include the quality of employment generated, inequality and income gap, manufacturing sector output and outcome among many others that unfolded in the session gradually.
Dr S P Sharma, Chief Economist & Deputy Secretary General, PHD Chamber of Commerce and Industry (PHDCCI) carried forward the session by comprehensively discussing the targets set by economic survey and the steps to be undertaken by the government as part of the union budget. At such a juncture of growth, Dr. Sharma explained the need for a tripartite responsible agreement between the government, the academia and the private sector to ensure a Viksit Bharat by 2047.
On the backdrop of the six pronged strategy of the economic survey for India to become Viksit Bharat, the union budget has identified 4 pillars – garib, yuva, annadata and naari to support the Indian economy. The four parameters of the budget have been addressed by several schemes of the government including the apprenticeship schemes for skilling, removal of compliances for MSME investment and others. Rationalization of long term capital gains and custom duty reforms are all a step towards empowering the four pillars of the Indian economy.
The limitation of the union budget as outlined by Dr. Sharma includes the peak tax imposition of 30% for the middle income groups. Dr. Sharma also enumerated the need for reforms in the indirect taxation system for ensuring a more inclusive India.
Ms Yuvika Singhal, Economist, QuantEco Research; Former Economist, Yes Bank & ICICI Bank in her brief remark on India’s budget as a step towards Viksit Bharat 2047 highlighted India’s possibility of achieving the two key milestones for viksit bharat- a 30 trillion economy and 1000 dollar per capita GDP. The inter-linkage between financial inclusion and economic growth was discussed in detail by Ms. Singhal. India, taking a huge leap forward in ensuring a banked population through initiatives like JAM trinity, fintechs, incentives for opening bank accounts, has undoubtedly helped India in moving a step forward towards becoming Viksit Bharat.
The key takeaways from the union budget, explained by Ms. Singhania includes comprehensive initiatives towards climate change and agriculture. In the arena of employment, the budget has not only limited itself to mere job creation, but focus has been on the formalization of the employment sector with special emphasis on the new entrants. The pragmatic step towards fiscal consolidation however has failed to address the uneven growth with k-shaped consumption, whereby the higher income groups are the largest contributors to India’s growing GDP, worsening the status of lower income groups. Ms. Singhania underlined the need for human capital development cannot be ignored to fulfill the aim of Viksit Bharat.
Mr Saugata Bhattacharya, Former Chief Economist, Axis Bank emphasized the roles to be played by the federal units- the states in the journey of India towards Viksit Bharat. The inability of the state to spend the allocated amount for the central sector and centrally sponsored schemes as a limitation towards a balanced development was outlined by Mr. Bhattacharya. He also applauded the government’s high handedness towards state accountability of developmental processes. The curb on freebies by the union and ensuring state’s responsibility towards empowerment of the people will also aid in fiscal consolidation and stabilization of the Indian economy, Mr. Bhattacharya explained.
The esteemed panelist Dr Rajesh Shukla, Managing Director and CEO, People Research on India’s Consumer Economy (PRICE) ICE360, Indian Institute of Management Udaipur applauded the government’s achievement in achieving the targets set as per the macro economic parameters. Dr Shukla emphasized on considering the way to Viksit Bharat as a process that cannot be entirely measured by analyzing an event like the union budget.
The budget has successfully addressed the issue of imbalance development by envisioning the expansion of urbanization and creating new economic hubs in the country. Dr. Shukla stated the need for empowerment of human resource and its better utilization through grassroot data driven policy formulation and implementation.
Mr Subhomoy Bhattacharjee, Consulting Editor, Business Standard; Professor of Practice, Director, Centre for Regulatory Governance, Jindal Global Law School, OP Jindal Global University, Sonipat in his excellent overview of Indian budget as a step towards viksit bharat, addressed the two extreme views supporting and opposing the government’s annual fiscal statement. The facets of the budget that has been criticized includes no state-specific allocation except for Bihar and Andhra Pradesh, fiscal incentives for the middle income groups in terms of taxation slabs, stated Mr. Bhattacharjee. These steps however, if viewed from the lens of fiscal prudence and ensuring state accountability for delivery of resources to the people can be considered as a welcome step, Mr. Bhattacharjee highlighted this in his address.
Prof Pooja Misra, Professor of Economics, Area Chair – Economics & IB, Birla Institute of Management Technology (BIMTECH), Noida shared insightful key elements of the union budget in the session. The challenges faced by India that need urgent attention include the middle-income trap, unequal growth, and global competitors who are ahead of India in terms of per-capita income. Prof. Pooja underlined the multi-dimensional role played by the Production Linked Incentive scheme in the formalization of labor, private sector investment among others. The government apart from encouraging private sector investment, has ensured 11.11 crores capex for infrastructure development of the country.
The key challenge highlighted by Prof. Pooja remains the implementation of the programs as envisioned. The medium to long term benefits of the various components of the budget, viz the transit oriented development of cities, upgrading industrial centers, etc. can only be achieved through execution and performance analysis of the initiatives.
The session concluded with the chair’s remarks on India’s position as a strong and resilient economy addressing the challenges of both internal spheres -unequal growth, food inflation – as well as external geo-political tensions. Prof Nilanjan Banik concluded the event by extending gratitude to the IMPRI team for successfully hosting the panel discussion and ensuring its smooth execution.
IMPRI’s 5th Annual Series of Thematic Deliberations and Analysis of Union Budget 2024-25
IMPRI’s 5th Annual Series of Thematic Deliberations and Analysis of Union Budget 2024-25
Watch the event at IMPRI #Web Policy Talk
Viksit Bharat – Developed India @2047 and Union Budget 2024-25
Acknowledgement- This article was written by Reetwika Mallick, Visiting Researcher and Assistant Editor at IMPRI, holds a masters in Political Science.
