A RECOVERY PLAN

Q. What are the three key measures you would like to see in the Union budget that will drive growth, given that the economy is in recession?

A.

ADITI NAYAR: Prioritisation of capital expenditure, especially projects already identified in the National Infrastructure Pipeline (NIP), and where the plans are at an advanced stage, will help to create a multiplier effect and boost the tentative economic revival.

Secondly, an adequate budgetary provision for the vaccine rollout will immeasurably boost confidence of the economic agents and aid in decision-making regarding both consumption and investment.

Additionally, clearance of subsidy arrears, pending dues to contractors and vendors, and expediting tax refunds will help boost liquidity as well as sentiment in the economy.

D.K. SRIVASTAVA: First, the government should focus on augmenting non-defence capital expenditure. This would lead to increased investment in construction and infrastructure, covering housing and roads among other sectors. These sectors will have high multiplier effects. Second, the government should come up with a revised fiscal consolidation roadmap. In 2020-21 and 2021-22, the Centre’s fiscal deficit may have to be kept in the range of 6-7 per cent of GDP, and fiscal consolidation to a more tangible extent may only begin 2022-23 onwards. The additional fiscal space in 2021-22, both for the central and state governments, should be used to shore up government expenditure pertaining both to the revenue and capital sides of the budget. Third, the government should reassess the NIP, identifying areas and sources of deficient investment in relation to the original investment plan and come up with a modified timeline. In particular, the role and the respective shares in investment of the state governments and PSEs may need to be re-evaluated to ensure their effective participation in the fulfilment of the NIP.

PRONAB SEN: I would like to see: i) higher grants to states for disease management and control, including for vaccination; ii) enhanced budgetary support for strengthening healthcare at the district and sub-district levels, including better terms to auxiliary nurse midwives (ANMs) and ASHA workers; and iii) budgetary support for expanding and upgrading health research and testing infrastructure across India.

Y.K. ALAGH: We need a real government spending programme to get us back on the upswing of the V curve. This should shore up health infrastructure for the vaccine programme; repair and expand the rural-urban trade and transport network; and strengthen first-stage processing in rural areas to strengthen the supply chain.

“We need a framework to implement diversification, market and infrastructure strengthening, rather than expect dramatic results and then fail”
Y.K. Alagh

Agriculture stood up against the downside. It needs support to do better. Steps against the paddy wheat rotation in northwest India would be a mistake. Maybe steps can be taken to further strengthen dairying and horticulture, for pulses and oilseeds in south Punjab and unirrigated