Once More, With Feeling

India Inc hopes the government will ambitiously change land, labour and agricultural policies to kickstart the economy

- Monica Bathija

Unemployment rate is at a 45-year high, GDP growth is at a five-year low. There is a revenue shortfall and a slowdown in consumption. Finance minister Nirmala Sitharaman has a tough job on her hands as she gets ready to present her first Union Budget in July.

Even as the finance ministry took to social media early this month to invite suggestions, analysts and experts say it remains to be seen how the FM will balance between fiscal consolidation and boosting growth. While prudent fiscal management is preferred over the long term, they say focus on growth will be critical now.

Two immediate priorities are clear: First, to build momentum for investment, and two, address consumption slowdown, particularly rural. “The expectations from the market would be to cut taxes so that you leave more money in the hands of the consumers, have reasonably good allocations to the public capex plan, and then incentivise the private sector to start the whole capex plan. A balance has to be made between both,” says Rajat Rajgarhia, MD and CEO, institutional equities, Motilal Oswal Financial Services.

The Confederation of Indian Industry (CII), in a presentation to Revenue Secretary Ajay Bhushan Pandey earlier this month, suggested measures to strengthen consumption. This includes creating a National Employment Policy, as suggested by government think-tank NITI Aayog, and identifying and incentivising sectors in both manufacturing and services—like food processing, textiles, building, construction—which have a potential for job creation.