With Union Budget just two days away, expectations are running high. Experts are looking forward to a growth-oriented Budget entailing some big-ticket reforms.
In a discussion on CNBC-TV18’s special show ‘Change India’ panelists Anil Jain, MD, Jain Irrigation, Richard Rekhy, CEO, KPMG India, Rujan Panjwani, ED, Edelweiss Financial and Subir Gokarn, Director- Research, Brookings India, spoke about their expectations from the Finance Minister and whether his Budget can revive the investment rate.
Gokarn believes giving additional amount to states is unlikely to crimp government’s efforts to pump up the economy and get money into infrastructure. According to him, when more money is given to states it absolves central government of spending money on various other schemes that states are involved into. “This is not a question of holding the central governments spending constant and giving more money to the states. That re-arrangement also has to be made,” he said.
On agriculture, Prime Minister has said har khet mein paani which means above 70 million hectares of area must be brought under irrigation, said Anil Jain, adding that it would require USD 30-40 billion over next 10 years. “Some of these funds can come from National Rural Employment Guarantee Act 2005 (NREGA) and other places. Development may not necessarily come at the cost of fiscal prudence,” he added.
Agreeing to Jain’s view, Rekhy said the government should not sacrifice fiscal prudence. He feels the government can have a fiscal deficit arising out of creating assets but capital expenditure may not necessarily be bad because it will help in generating revenues.
On fiscal deficit, Panjwani said an estimate above 3.6 percent will be acceptable to the market as long as it is backed by some sort of investment which fuels growth. According to him, it is more important for the market to see if the government can lay down a five-year plan or a roadmap and address those issues going ahead.
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