The Indian government needs to step away from the idea of big bang reforms and look at moderate expectations for this budget, said Indermit Singh Gill, Non-resident Senior Fellow at the Brookings Institution. Gill was speaking at an online panel discussion organised by the Kautilya School of Public Policy on January 20.
No fiscal policy reform can help India instantly jump back from the jolt that the pandemic has dealt, said Gill. "India does not need a big bang budget now. It can have small bangs but no big reforms. No fiscal action can offset a 25 per cent dip in growth," he said. "It is important that the Finance Minister does not go on to offset a big bang lockdown with a big bang budget. Focus on the execution rather than the allocation. They need to get foreign investments. There is a trust deficit. The government has been following a pro-business approach and they need to put a distance between the big businesses and themselves," he added.
The webinar also had senior journalist Nidhi Razdan, Ram Mohan Naidu, a Member of Parliament and a member of the Telegu Desam Party, Shweta Rajpal Kohli, Head of Public Policy for Sequoia Capital, India & South East Asia, Yamini Aiyar, President & Chief Executive, Centre for Policy Research, M Sri Bharat President, GITAM Deemed University, Sridhar Pabbisetty, Founding Director, Kautilya School of Public Policy and Prateek Kanwal, Co-founder of the institute.
India needs a better safety net and the COVID-19 pandemic and the ensuing lockdown has taught us that. "One thing that helped India during this period was the PDS and schemes like the MGNERGA. Our welfare network is only for the rural areas and that too gets active after there is a need. More than 65 per cent of the informal workers did not have savings enough for food. We need to build a safety net for the urban areas," said Yamini Aiyar, adding that a scheme like MGNRecoEGA for rural areas is the need of the hour.
Its been a difficult year and the government can give the students a moratorium on their education loans, said Pabbisetty. "The government needs to see how they can make higher education cheaper. Just pushing people towards higher education won't work. When a labourer does not choose to take up skill development courses it is because he would reason that his current jobs pay him more than a stipend and his income won't really increase if he goes through the course. That isbu because it is a chaotic market," he added.
The states will be looking for compensation for the health and economic crisis in the budget, said Naidu. "Maybe some GST concessions can help. Even though health is a state subject, they would also be looking forward to a helping hand on health infrastructure from the Centre," he said and added, "The centre does not facilitate the funds at the right time. We need to focus on employment generation. I would like to see some discussion happening on employment and it automatically takes in — health, education etc."
The NEP speaks a good language but how much of it will be implemented is the question, said Bharat. "The challenge for the budget is to strengthen the weak. We need to invest in education for the long term. The budget needs to spend on quick revenue sources but also ensure that the long term growth boosters like the MSMEs do not die," he added.
India needs to concentrate more on stabilizing rather than growth, said Aiyar. "What we need to do right now is to steady the ship. There are many deep reforms that India needs to confront but this is not the time," she said. "I only hope that in our pursuit to become Aatmanirbhar Bharat we don't become a closed economy and bring back things like License Raj," she added.
