Budget 2024-25 has generated a debate on whether enough is being done to move the economy to the high growth trajectory envisaged over the medium and long term, and what more needs to be done.
In a panel discussion on ‘Decoding The Budget 2024-25’ organised by the hindu businessline, experts analysed various sectors —from agriculture to the stock market — to come up with solutions to maximise welfare and growth.
Food and Fertilizer Subsidies
A manufacturing revolution cannot take place in India as long as demand from the masses is missing, said Ashok Gulati, Distinguished Professor, ICRIER.
“Only the top 15-20 per cent of the population have purchasing power. And there is only that many televisions and cars they can buy. Unless we increase the income of the masses in the rural areas, this question of growth of manufacturing, one year at 8 per cent and then again down, will continue,” he said.
Gulati said that to increase the efficiency of the food and fertilizer subsidy system, food coupons and digital coupons for fertilizers could be given. ”Why give food subsidies for only rice and wheat? By giving food coupons with more options to choose from, you will save a lot and give more nutrition to the people,” he said.
He added that giving digital coupons to farmers for soluble fertilizer can increase efficiency up to 90 per cent from about 30 per cent.
Employment Focus
Focus on employment and employability definitely stands out in each and every aspect of the budget, said Jyoti Vij, DG, FICCI. “In our interactions with the government over the last couple of months, the narrative that I’m seeing is that a lot of focus is going to employability. If you’re able to create employability and collaborate with industry into the whole skill development programme, I think we then get a very holistic approach,” she said adding that there was a lot more outreach from both government and industry sides
On the budget proposal of extending internship programs using CSR spends, Vij said it was a smart way of using the CSR program to plug the skill gap. “But the most important thing would be how fast we are able to create employable youth and work collaboratively in this space.”
On tax hike
On the increase in long term gains tax in the budget to 12.5 per cent from 10 per cent, A Balasubramanian, MD and CEO, Aditya Birla Sun Life AMC Limited, said that it has simplified the existing rate structure and the ability to pay 2.5 per cent extra tax was far higher today, given the healthy growth in corporate earnings and stock prices.
The provisions on agriculture in the budget can be seen in terms of four strategic issues, productivity and sustainability, self sufficiency and resilience and diversification, said Sitikantha Pattanaik, Chief Economist, NABARD.
He pointed out that earlier, when global growth in agriculture used to come from inputs, now most of it was coming from productivity.
“If India’s per capita income is going to increase by eight times, GDP by nine times and population will pick up to 1.65 billion, as last week was specified by an NITI Aayog, we have to meet that challenge. For that we have to also prepare ourselves,” he said.
“To think about productivity in agriculture, we have to take three measures together... One is a review of research set up. Second is setting up digital infrastructure in agriculture. Third is new cooperation policy will be announced,” he added.