- Prelims: Indian Economy(GDP, GVA, fiscal policy, budget, economic survey, budget, Employment etc )
- Mains GS Paper III: Fiscal policy, Monetary policy, GDP, Issues related to planning etc.
ARTICLE HIGHLIGHTS
- The Budget 2023-24, has received almost universal praise in the English language media.
- The Budget is pro-growth, and their prognosis is plausible.
INSIGHTS ON THE ISSUE
Context
Budget:
- The government’s blueprint on:
- expenditure
- taxes it plans to levy
- other transactions which affect the economy and lives of citizens.
- Article 112 of the Indian Constitution: Union Budget of a year is referred to as the Annual Financial Statement (AFS).
- The Budget Division of the Department of Economic Affairs in the Finance Ministry is the nodal body responsible for preparing the Budget.
- Components of the Budget:
- expenditure
- receipts
- deficit indicators.
- Depending on the manner in which they are defined, there can be many classifications and indicators of expenditure, receipts and deficits.
The priorities articulated in the vision for Amrit Kaal:
- opportunities for citizens with a focus on the youth
- growth and job creation
- strong and stable macroeconomic environment
- Saptarishi(seven priorities)
- infrastructure and development
- green growth
- financial sector
- inclusive development
- reaching the last mile, to mention a few.
Evidences of growth:
- Data shows that private investment plans during the first nine months of this year to be over 50% greater than what they were a year ago.
- Government proposed a target of $5 trillion within five years (2024-25) for India’s economy.
- India has overtaken the United Kingdom to become the world’s fifth largest economy.
- Consultancy Centre for Economics and Business Research (CEBR): By 2035, India’s economy would reach $10 trillion and become the world’s third largest by 2037.
The West’s self-interest in India:
- There is an element of awe that a country once a byword for famine has sloughed off the deadweight of colonial exploitation and grown.
- India is not only a relatively rare democracy in the east but also the largest one in terms of population.
- As all the countries in the West are democracies, western elites see a possible alliance of interests.
- India’s growing economic size has made it attractive for investors.
- India’s fast growth is an investment opportunity for the surplus savings of the West.
- Investing money in India is likely to fetch the highest returns globally.
- The continuous support from the West about India’s growth reflects a deep-seated self interest.
Issues of unemployment:
- Unemployment was barely mentioned in the Finance Minister’s Budget speech.
- Government data show that in mid-2022, unemployment among urban males was much higher than it was a decade ago.
- Data from the Centre For Monitoring Indian Economy Pvt. Ltd: It shows that the number of people employed in December 2022 was less than it was in 2016.
- The growth of the national economy has not generated an equal growth in employment.
- India does not have an employment policy, either at the Centre or in the States.
- Welfarism, defined by the free or subsidized distribution of private goods, is no substitute.
How will employment opportunities rise?
- Employment opportunities will arise only when there is demand for goods in the production of which they can participate.
- Increased demand for goods of mass consumption alone will lead to an expansion in the demand for these workers.
- For an expansion of this demand, arresting the price of food would be essential.
Way Forward
- India could well grow fast over the next decade-and-a-half without generating sufficient employment for the legion of unemployed youth, especially in rural areas.
- A concerted policy focus can create the conditions for employment generation in India.
- Political parties seem to be pursuing growth with a view to enhancing their electoral prospects, without concern for a possible negative fallout.
- India needs growth as it has a backlog of poverty. But the growth that one often sees does not do enough for improving the lives of the poorest, such as by generating employment, and is ecologically harmful.
- Size is valuable only when it enhances the well being of the population.
QUESTION FOR PRACTICE
Q. Explain intergenerational and intragenerational issues of equity from the perspective of inclusive growth and sustainable growth.(UPSC 2020) (200 WORDS, 10 MARKS)
