What do you expect from the Union Budget? What do you want the finance minister to deliver next week? Of course, we know that it is a vote on account and there may be very less chances that the government will deliver something big, but there is no harm in waiting.
Finance Ministry officials have already made ‘halwa’ this week, which is an annual ritual done at North Block every year before the Union Budget. The CRPF forces have also beefed up security at the finance minister’s office and the parliament to ensure the confidentiality of the Budget. The questions are many, whether it will focus on growth and accelerate capital spending or reduce spending to limit the debt, which is significantly high.
We at ETBFSI have done a Budget Waiting Series. I moderated sessions with 15 key speakers from the BFSI sector over the past few months. We covered their views in various stories, which you can see here. But to understand what the general public expects, I talked to many of my colleagues from different teams and people who are not very knowledgeable about finance.
Education, health and women empowerment, and employment are the main areas they want the finance minister to address. Here is my version of what I have learned from many people. Everything cannot be covered in the Budget, but yes there could be direction and policies because the issues are important and need attention.
Not just education, but skills
There are various policies in education, but much more is needed. Specifically, I think reskilling and skill based education is the need of the hour in schools.
Someone from the senior management of a blue chip company once told me that when a top foreign brand famous for its furniture and homewares came to India, it didn’t know that people couldn’t put together even basic products. Carpentry is never taught here in any school, so people can’t even fix the little things. Similar is the case when repairing water taps at home or even replacing a fuse or electrical sockets. Most of the people cannot do it and the challenge today is to find people who can do it.
I remember, on his first Independence Day as Prime Minister, Narendra Modi said, “Sometimes, we look for a good driver but he is not available, we look for a plumber but he is not available. If we need a good driver. a cook, he is not available. We have youth, they are unemployed but the kind of youth we are looking for are not available. If we have to promote the development of our country then our mission must be skill development and skilled India.”
Vocational training is a must for every child. Along with this, life saving skills are also required. Therefore, the Budget should not only allocate funds for primary and higher education, they should also look at such skills rationally. As a growing middle class, we should have more such people.
Importantly, it is high time that India looks at the quality of education. In the rural areas children from the age of 14-18 cannot even write in their own language it is a disaster. This will be a burden for the person and the country as well.
Employment – Lack of match
In the digital world, the nature of jobs has also changed. No one could have imagined that GenZ could even think of being a YouTuber as a career. But along with more opportunities, there are also more challenges. The most important thing that I see, and I have also learned from many senior management of major companies, is that there is no such thing as an exact match. Companies are looking for X skills and candidates have Y.
So, on one hand there are people applying in lakhs for a few hundred jobs, just because they are offered by the government but on the other hand, companies are struggling to fill the data scientist, AI experts, GenAI related jobs.
The government addressed AI in its previous Budget but a lot needs to be done to generate employment. On the one hand, jobs are not being generated for educated people, on the other, blue-collar jobs are under threat as companies shift to automation.
Interestingly, the infrastructure and real estate sectors are also facing a shortage of work. Even farmers can’t find people to work on farms. And there are interesting reasons for this. Government subsidies have helped people monetarily, so many are reluctant to work.
India’s problems are very different from Bharat when it comes to jobs.
Specifically with the growing middle class, there will be more challenges to find people for low-level jobs.
health
After Covid the cost of medical care has gone up. Insurance premiums and hospital costs have become exorbitant. Importantly, new diseases are becoming common due to stressful and sedentary lifestyles and climate changes. The cases of diabetes, hypertension and heart disease are increasing. Heart disease remains the leading killer in Mumbai, but cerebrovascular conditions, contributing to 14 deaths per day, show a 6-8% increase.
Although there could be important reasons, I think the Food and Drug Administration department should be strengthened. Food adulteration at restaurants and in packaged foods is high and harms people. Many of the food companies add unhealthy ingredients and I doubt many products available in the local stores are even examined.
State of the economy
In fiscal 2023-24, buoyancy in both direct and indirect taxes is expected to exceed Budget estimates, contributing to higher than expected collections. Despite lower than projected nominal GDP growth, tax receipts are growing, likely helping the government meet its fiscal deficit target. The conservative estimates of the previous year’s Budget are in contrast to the current buoyancy, with the tax-GDP ratio expected to remain elevated at 11.3%. The main driver for success on the fiscal deficit is expected to be increased tax receipts rather than spending cuts. Looking ahead to FY2024-25, nominal GDP growth is projected to pick up, while real GDP growth may decelerate marginally. This outlook supports a 15% year-on-year growth projection for tax revenues, with ample growth across both direct and indirect taxes. This gives the government some relief on the resources front. With GDP growth expected to be above 7%, it keeps the government on track to reach the $5 trillion economic goal.
Read our monthly coverage of the state of the economy here.
Right policies
In addition to this, the focus on social security is important. A great demand of the people is that tax structures should also be changed according to today’s income. The government should focus on bringing more people under the tax net and redesign current tax slabs. More importantly, when we are the fastest growing economy, we need policies that will expand infrastructure and opportunities. We have luxury cars but no traffic control, we have advanced degrees but no jobs, we have exorbitantly expensive housing but no quality of life… If we could think about such things broadly, India would be a healthy and happy country. Will the Budget do it?
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