As in the President’s address to Parliament, the Economic Survey, authored by the Chief Economic Advisor, has listed India as a haven of macro economic stability in a turbulent world economy. An unprecedented drop in the prices of crude oil has helped India achieve a stable macro economy with the result that the rupee is not as volatile as its peer currencies in several key economies like Brazil, Russia and Indonesia. Besides, a huge burden of fuel subsidy has been eased with positive consequences for the government finances. Sustained by a robust services sector, the Indian economy is projected to grow by well over 7% in 2016-17, for the third year in a row. But beneath this big picture, there are large patches of stress, an all-important agriculture sector being the main sufferer of falling production and low wages, accentuated by successive monsoon failure.
If the Survey is a pointer towards the direction of the Union Budget, a good chunk of fiscal measures to mitigate the agrarian crisis in most parts of the country should be unveiled by Finance Minister Arun Jaitley on February 29. The Survey has highlighted the need for a transformation of the sector to ensure sustainable livelihoods for the farmers and food security for the country. Over-dependence on monsoon in the wake of inadequate irrigation facilities is the main cause for often repeated stress for an overwhelming majority of our citizens who find themselves pulled back into the vicious circle of poverty by failure of rains just for one or two seasons. With net irrigated area of just 33.9%, the situation cannot be expected to improve unless massive resources are committed for the basic agriculture infrastructure.
Expectedly, the crucial government document has highlighted the importance of the Goods and Services Tax, billed to be the biggest tax reform but pitted against a political obstacle that looks difficult to go soon. Capturing the mood of the nation, the Survey has noted how creation of “good jobs” in the formal sector must accompany the haven of macro stability. Of the 10.5 million new jobs created between 1989 and 2010, only 3.7 million - about 35% – were in the formal sector. The challenge is to create more of formal sector employment which can come about only by encouraging entrepreneurs. It has aptly described the business paradigm in the organised sector as the Mahabharata’s Charkravyuha which provided an easy entry but a fatal exit. The startups should certainly not end up as Abhimanyus, even though they match up to the brave son of Arjuna. The other areas which are desperate for effective government intervention are health and education. Hopefully, they too will get Jaitley’s attention.
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