Union Budget 2019: Things India Expects From FM

BW Businessworld gets M. Govinda Rao, member, 14th Finance Commission; Arun Kumar, former JNU economist; Yoginder K. Alagh, former Union Minister; and Lord Meghnad Desai, British economist, to debate the key priorities for the Union FM Nirmala Sitharaman in the run-up to the Union Budget. Edited Excerpts: By Team BW

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What should be the key priorities in Union FM Nirmala Sitharaman’s maiden Union Budget?

M GOVINDA RAO (MGR): Accelerating the growth of the economy and creating employment are the two most important priorities. There is also the issue of alleviating farm distress, but agriculture is a state subject in the Constitution. With the capacity utilization in the industrial sector reaching a high level, much of the growth has to come from new investments. This requires increasing public investments, rejuvenating industrial climate, inter alia, and banking reforms to make them lend more.

ARUN KUMAR (AK): One can’t predict what the FM would do. My suggestion would be to address the problems faced by the unorganized sector urgently. The current slowdown in the economy originated in the unorganized sector has been declining since the demonetization. It was further hit by the Goods and Services Tax (GST) and then by the Non-Banking Financial Companies (NBFC) crisis. Attempt to force digitization is further damaging it. This has led to the demand shortage, which is now impacting the organized sector. To revive the unorganized sector, a simpler GST (which I have been proposing) is required and credit availability to this sector improved. Businesses in this sector are short of working capital and cannot cope with GST, even though they are exempt from registration under GST. The farming sector is a major component of this sector and needs support because the farmers’ incomes have been affected adversely. All this has also impacted the employment generation. So, investment in employment generating sectors like education, health, and rural infrastructure need to be greatly stepped up.