Well-entrenched 'Saptarishi' has plugs that need attention

The farming community expected zero interest loans and minimum support price (MSP) that assures cost of production along with some returns over and above it. Agriculture needs a big push in terms of public investment in the wake of rising costs of inputs such as prices of fertilizers, pesticides, electricity charges and hiring machinery; non-remunerative prices of agricultural produce which do not cover returns over the cost of production and finally a low annual income

The Union Budget has been presented when the global economy is experiencing a slowdown in growth and rising inflation, which has been a concern for all. The Union Budget 2023 has spelt out seven priorities that complement each other and act as the 'Saptarishi' guiding us through the Amrit Kaal. Its vision comprises a technology-driven and knowledge-based economy with strong public finances. Although Indian economy moved from 10th to fifth largest economy in the world, the pertinent point is that the wealth created in the economy should be distributed evenly among all. However, what we could see are rural-urban inequalities, which are widening with every passing year. This could adversely impact the country's social cohesion and social fabric.

Further, there is a mention about MSMEs and green growth efforts for achieving carbon neutral economy in the near future. Agriculture credit target will be increased to Rs. 20 lakh crore with a focus on animal husbandry, dairy and fisheries.

In fact, it should have focused on unemployment, falling exports, sluggish private investment and a declining private consumption due to rising commodity prices, among others. On the other hand, the measures that they announced are urban biased while effectively neglecting rural areas. The piecemeal initiatives do not really address the structural issues confronted by the Indian economy.

In fact, the farming community expected zero interest loans and minimum support price (MSP) that assures cost of production along with some returns over and above it.

Agriculture needs a big push in terms of public investment in the wake of rising costs of inputs such as prices of fertilizers, pesticides, electricity charges and hiring machinery; non-remunerative prices of agricultural produce which do not cover returns over the cost of production and finally a low annual income. Therefore, doubling farmers' income is still a slogan that should become a reality, which is a task before the Government of India and state governments.

The impact of PM Kisan is negligible as it is a very small amount and farmers find it inadequate. Addressing rising commodity prices and widening rural–urban inequalities is a challenge that has to be focused on a priority basis. Further, the per capita income Rs. 1,97,000 per person does not apply to a majority of the rural communities signifying the glaring inequalities in the economy.

Further, it appears that the manufacturing sector has been given priority in terms of huge capital expenditure and infrastructure creation so that employment generation takes place for the large masses that are added to the labour market every year. It augurs well that Rs.75,000 crore have been allocated in the Union Budget for basic infrastructure development, while the Indian Railways are provided a huge amount for the first time. Although it announced massive allocations for various schemes and programmes one has to see how this will translated into action in order to achieve the expected results.

However, it should be mentioned that the declining urban unemployment rate is due to the recovery of private sector post-Covid, while the new employment generation is small.

Corporate tax should be hiked as there is a potential in increasing it and the tax-to-GDP ratio can be ramped up to raise the revenue to the government that can address problems of millions of unemployed youth.

In the wake of recently concluded UN Conference on Biodiversity, COP-15 in Montreal, that the Union Budget has appropriately mentioned about the promotion of conservation of biodiversity, creating ecotourism opportunities and income generation for local communities is a timely and welcome feature. It is interesting to note that there is a huge increase in Ramsar sites after the present government took over in 2014. Further, being biodiversity-rich, it can explore possibilities of generating revenue from tradable bio-resources by levying cess and promoting conservation of biodiversity in view of natural resources extraction by corporates, who are making medicines, perfumes and other tradable commodities out of it. Besides, the Union Budget has announced that MISHTI programme will be taken up for mangrove plantation along the coastal line and salt pan lands.

In one way, it appeared that the Finance Minister tried to appease the 'missing middle class' people with income-tax exemption. All said and done it needs to be seen how the Union Government is planning to accomplish whatever is announced in Budget 2023 without resorting to external borrowings. It was reported that the Bloomberg survey showed that the decline in fiscal deficit from 6.4 per cent to 5.9 per cent of GDP requires another year of record borrowing. If that is true, then that will imply that the debt burden would go up heavily on every Indian unless the resources are spent on productive assets creation and income generation activities. Therefore, instead of resorting to loans, which becomes unbearable, the government can adopt a more accommodative macroeconomic framework, reallocate the public expenditures and improve tax revenues, among others.

(The author is an Economist, who was earlier associated with UNDP, UN Women, New Delhi and UNICEF, Indonesia)