Priorities for the next govt

It must deliver on policies required for equitable growth R egardless of who wins the election, the new government's primary focus will be implementing what has been promised in its election manifesto.

Much of this will involve funding of new welfare schemes in the Budget, which will be presented in the middle of the year. However, the real need is for redesigning development strategy to bring us closer to the goal of growth with equity.

There are some long-term deficiencies in our development performance and some shortfalls that recent data indicates, which require measures: (i) to stimulate the growth of private consumption and corporate investment; (ii) to promote the growth in productive jobs; and, related to this, a policy for small and medium industries that encourages them to grow; (iii) substantial improvements in education, skill development, and healthcare to make our labour force more suitable for newer occupations; and (iv) connected with all this, greater respect for the need and the benefits of effective federalism.

First, let's consider the need to stimulate private consumption. The most recent National Accounts Statistics (NAS) show a drop in the annual rate of growth of consumption from around 7 per cent between 2011-12 and 2018-19 to a little over 4 per cent in the past five years.(Table 1.1 NAS 2024).

In fact, the second advance estimate for 2023-24 shows only a 3 per cent growth in private consumption. In a large country like India, a slowdown in private consumption growth will affect corporate investment. That is why the recent NAS shows a drop in the annual rate of growth of private corporate investment from a little over 10 per cent between 2011-12 and 2015-16 to under 5 per cent in the years since then until 2022-23. (Table 1.11 NAS2024).