Reiterating its commitment of doubling of farmer’s income by the year 2022 the Economic Survey has identified agriculture, education and employment to be the focus area for the next budget.
Acknowledging an area of concern, is the first step towards its successful resolution, but blowing them out of proportion is mere politics. Understanding that agriculture sector’s growth, measured simply by increase in production will never brings desired results, government’s focus is on increasing the farmer’s income. There are several initiatives in the pipeline; discussions like direct market sale of farm produce and compensation to the farmers for difference in minimum support price (MSP) and the market price (Bhawanter), insurance; targeting towards the fluctuating prices of farm produce, government’s plan to align import/export policy to farmer’s price realisation instead of merely looking at consumer price inflation, all these are welcome steps. Increasing MSP without having complete supply chain linkages and warehousing facilities is a drain on the government resources, is inflationary and distorting crop production pattern.
Employment generation is a subject of big debate. With no reliable job data after 2011, all estimates are merely counter claims. Government has categorically stated that it is focusing on jobs creation through entrepreneurship and self employment. India is the fastest growing economy in the world with huge infrastructure spend by the government, there is ample evidence that this is not jobless growth.
Economic survey points out that formal sector payroll share is 53 per cent under Goods and Service Tax (GST) net, which was 31per cent as defined under EPFO/ESIC earlier, showing that GST has significantly contributed towards formalisation of many informal sectors. A growth of 50 per cent in the number of tax payers under indirect tax regime and 12 per cent increase in GST collections shows a positive impact of tax compliances after GST. Similarly, increase in direct tax collection to the tune of 19 indicates Demonetisation has benefitted tax compliance, bringing more resources in the hands of government, helping towards lowering and streamlining of tax rates.
Inequality of income is a global concern, recent Oxfam report puts it as a major global challenge, though there is no specific mention of India, but large section of our population has been left out of reaping benefits of economic growth, leading to concentration of wealth. This is a historical fact and not because of current government’s action. Plugging leakages and targeted delivery of government social benefit schemes through Jan Dhan Account and Direct Benefit Transfer (DBT) has been able to correct this menace to a large extent. In addition better tax compliance, curbing tax evasion and data mining under new regime is bringing desired positive results.
Participating in the growth of India’s export is much distributed. As per the survey, top 1 per cent of Indian firms account for only 38 per cent of exports, whereas globally this average is about 60 per cent. With domestic export growth showing healthy 12 per cent increase; India will reap the benefit of improved global growth predictions. Our foreign direct investment (FDI) is also steadily rising. We have foreign exchange reserve of $409 billion.Though rising global fuel prices is a challenge but they are expected to stabilise in future. All these healthy macroeconomic parameters, point towards a comfortable position to easily surpass 7.5 per cent Gross Domestic Product (GDP) growth rate next year. Government is expected to stick to fiscal deficit target of 3.2 per cent of GDP with assurance that there will be no cut in infrastructure spend, meeting its expected targets through disinvestment proceeds.
( The writer is national spokesperson, BJP economic affairs )