Union Budget 2015: Moved on lot of important issues, says Panagariya

Latha: What is the net effect on consumption? There has been a bit of an increase across the board, excise duty, service tax, half a percent; is there anything to boost the economy at all?

Panagariya: The way I see it is that ultimately the Budget really is meant to boost growth whether it does through consumption expenditure rising or investment rising, that remains to be seen. However, overall I just see that lot of the things that need to be done that I have argued even from outside of the Niti Aayog have been done in this Budget; lots of announcements.

Let me give you a list of things that have been done which many of the commentators seem to be missing -- bankruptcy laws, this is something extremely important. In India, the exit of the firms has been incredibly difficult and the Budget offers to put in place a modern bankruptcy law. It talks about -- of course infrastructure is a major plank of the Budget, it also promises to give relief to the workers in the organised sector on the front of Employees' State Insurance and Employees' Provident Fund (EPF) and that is going to be a major change if it is brought about in terms of boosting the environment in the organised sector because currently anybody who earns Rs 6,000 per month, about Rs 3,000 gets taken away so Rs 3,000 is too little to live on. So, the Budget actually promises to revisit this and address these mandatory deductions that happen in the organised sector.

We already know that the Land Acquisition act is there in the parliament being reformed and on the labour side, the Prime Minister has decided to let the states change the laws. So, all the pieces of the puzzle in terms of boosting employment particularly in the unskilled labour intensive sectors seem to be coming together and that is a big news.