The much-awaited Budget session of Parliament has kicked off today. Every Budget is an opportunity to set out a clear path for the economy, but this time it seems more important than never before. India, with its high single-digit growth rates, has been touted as one of the few 'bright spots' in an otherwise gloomy global economy. That said, its challenges are still far from being over. Slow reforms, low rural demand, declining exports, less-than-expected corporate earnings, lack of private sector investment, real estate and banking sector woes – the Budget must be able to respond to all these challenges.
First of all, I think all eyes will be on how the parliamentarians handle this session. As of date, several key bills –including Bankruptcy Code, Factories Amendment and Land Acquisition bills – are yet to be taken up for debate in the Lower House. Several other bills – including GST, Real Estate and Industries Amendment bills – are also pending before the opposition–controlled Upper House. These are economic reform-enabling legislation, and if obstructionist politics again gets in the way of passing them, we are bound to lose out on opportunities to capitalize on the fortuitous circumstances created by the global slowdown.
There is a wide-ranging agreement that three key sectors require special attention in the Budget: infrastructure, banking and real estate. The Centre, which has fast paced its investment in the infrastructure segment in the current fiscal, should keep up the pace the next fiscal, in the background of weak corporate sector investment. Similarly, I expect the Budget to provide direction on addressing the lingering problem of NPAs in the banking sector. An analysis shows that cumulative gross NPAs of 24 listed public sector banks stood at Rs 3,93,035 crore as on December 31, 2015. These figures speak for themselves. Third, the realty sector – which contributes nearly 6 percent to the GDP – has been facing a prolonged slowdown for quite some time now. Urgent steps are required to revive the sector.
As far as the MSME sector is concerned, I think time has come to act on creating an efficient mechanism for credit delivery. There are several schemes, including the recently launched MUDRA scheme, to help MSME players get timely and adequate credit, but unfortunately most of them still exist on paper only. So, I expect the Budget to come up with at least some clear measures to address this problem, which I think has remained the biggest challenge facing the sector for decades. In addition, concrete measures should also be introduced to push forward all the recently launched programmes related to the sector, including Start-up India and Kaushal Vikas Yojana.
What do you want from the Budget? I invite your opinions. |
