Union Budget focuses on ambitious growth target, reducing fiscal deficit: Montek Singh Ahluwalia

Indian economist and former Deputy Chairman of the Planning Commission of India, Montek Singh Ahluwalia remarked that the recent budget presented by the Modi-led BJP government scored well by aiming to reduce the fiscal deficit and focussing on growth spurred by an increase in capital expenditure. Ahluwalia was speaking at the 11th edition of the ThinkEdu conclave on the topic "Resilience and Reorientation: Tomorrow's Economy". 

In a session chaired by Vice-Chancellor of SASTRA University S Vaidhyasubramaniam, Montek Singh Ahluwalia said, “The target of 6.5% growth is good as it is ambitious when the rest of the world is going to be in bad shape. Most international organisations are predicting positive growth in India, along the 6.1% range.” He, however, added that the revival of private investment was key for the economy to witness a growth spurt. Even as there is a significant budget apportioned to creating infrastructure, he pointed out that the role of state governments in earmarking budgets for capital expenditure and the Centre resolving problems of land acquisition are the two red flags that need to be addressed. 

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In addition to his commentary on the budget, financial resilience was largely the theme that Ahluwalia chose to speak to the audience on. From fool-proofing the economy from the outbreak of the Russia-Ukraine war to deft handling of the current account deficit, his address bore a note of caution for policymakers and economists who face multiple challenges in a world where many economies are battling volatility. He urged them to create a bulwark for the agricultural sector to withstand the shocks of climate change. Drought-proofing the agriculture sector from the impact of unseasonal rains and a patchy monsoon in certain arid regions was a necessary step to protect the economy, he said. 

Raising concerns about inadequate funding for agricultural research, the former Planning Commission member stated that the devolution of funds for research in agriculture would directly impact the productivity, yield and food security of the country. A delicate balance between genetically modified crops and organic farming needs to be struck, he said while still elaborating on the need to build resilience in the agricultural sector.