'Budget needs scheme like MNREGA for rural economy'

By Romesh Tiwari,

Modi 2.0 needs new modified MNREGA type schemes to boost the Rural economy and pump up the consumption as earliest as possible. Attempt to achieve fiscal deficit target will deepen the crisis in Investment scene for the long term. I expect this budget to start a long-term policy for the development and growth of small and micro businesses which are badly affected after De-monetisation and GST. Investors, in general, are realizing the need for immediate reforms to deal with the mess of bad loans piled up with banks and stalling investment cycle. Its time to move the Make in India concept from papers to a realistic long-term policy. The US-China tariff war is an opportunity that can immensely help the Indian manufacturing sector if this budget includes an investment-friendly policy and faster clearances for new manufacturing units. Increase in government expenditure with a focus on reviving rural economy and infrastructure projects does not leave any room for reducing the fiscal deficit in this budget. Besides, the investors are expecting some reforms in the upcoming budget also. For example, the slow down in consumption is evident from all the data coming in since demonetization. As the first budget out of 5 expected budgets, this government can afford to make a new long-term plan that starts from this budget and can be continued to more inclusive and sustainable growth. With the mess around big bad defaults and the opacity of system, the future will be more unpredictable unless the government makes them liable and accountable towards the investors' trust. A rising mismatch between availability of medical facilities and lifestyle-related chronic diseases is affecting a big proportion of the workforce. An affordable and widely accessible plan for public healthcare policy is expected in this budget. An unambiguous message and a simplified policy for boosting the growth of Small and Micro businesses is the optimum way to attain the more equitable distribution of income and a consistent decrease in the unemployment rate. One of the dream projects of Narendra Modi that could not be implemented in his previous stint. This budget is high time to start implementation on this ambitious project that has the potential to start the process of an all-inclusive long term systematic growth. Hence, a lot of bold steps, as mentioned, are the investor’s community looking forward to and in case the government fails to address these concerns and tries to balance the fiscal deficit first, it will disappoint the community in large scale.

The author is Head of Research at CapitalAim.