Preparation for Budget: Cautious and realistic long-term approach needed
By Vivek Pattanayak*
The Union and States are getting prepared to make presentation of the budget for the year 2023-24 , and as usual consultations with various stake-holders are taking place. Understandably, based on the projection of IMF and RBI there is tendency to project a growth for the year. Geopolitical situation is uncertain and even can be considered as volatile taking into account the unpredictable outcome of the Ukraine war, China’s belligerency towards Taiwan, unstable condition on the south China sea and the sabre-rattling on the borders.
If one sees the Covid-19 situation in China after its relaxation of the long imposed Zero Covid-19 policy one should not be smug and lower the guards, and in particular one should heed to what the Deputy Director General, WHO stated recently, “pandemic is still there”.
The US Federal Reserve is continuing to keep the interest rates high to keep the inflation down. This may spark-off a frightening recession which may have global dimension. Some even say that it may be like the depression of the early thirties of the last century.
India is poised in a vulnerable situation due to our heavy dependence on imported fossil fuel whose price is high in spite of the cheap Russian source. Trade deficit is high due to poor export in spite of occasional growth. It is an additional burden. Foreign exchange reserves had made some noticeable decline in the recent past. Rupee is weak before US dollar reaching all time high. Unemployment is high. Inflation is causing concern. Banks are still to get over the heavy burden of non-performing assets.
In the light of this, budget should be realistic and have enough room to adjust to surprises. A cautious approach is recommended, and it should be the way forward in making estimates.
In the light of these trends, Odisha which has managed its finances admirably well for several years keeping within the discipline imposed by FRBM Act and has made a spectacular growth in budget size in last twenty years should use its resources wisely to obtain maximum benefits for the State. Few suggestions are outlined in the context of working out details of the budget.
Having handled the first and the second wave of dreadful pandemic steadfastly with success by creating temporary health infrastructure, the policy makers should design the budget to create long term investment in health sector in particular by way of strengthening human resources in having trained doctors, paramedics, nurses, auxiliary staff in adequate number so that in the event of unforeseen situation there should not be any shortage. Fatigue can set in if they are over-worked. While doing this, public health sector should be augmented at the grass root level. Fortunately in Odisha public health courses have proliferated in the last few years having created adequate number of public health experts having specialized in the field of epidemiology, biostatistics, data analytics, environmental and occupational health, public health law and ethics and tribal health etc.
While making effort to improve health sector, one should focus on nutrition of the children. Number of stunted and wasted children have caused concern. The Think-Tank of Odisha recently organized a seminar on the topic which included Basant Kar an eminent nutrition expert of global standing. The Group has made some long-term practical and modest recommendations which should be kept in view as they are achievable.
In the unirrigated area where indigenous people live on minor millet, promotion of millet should be encouraged to be grown, and success of millet mission should be taken advantage of.
In the rural areas agriculture based industries in MSME sector should be promoted as they do not involve large scale land acquisition,rehabilitation of displaced persons and burden of tortuous environmental clearances. It is well known that MSME sector provides large employment, contributes handsomely to GDP, and export potentialities are immense for the products of this sector.
After the pandemic occasioned lockdown and in spite of Ukraine war, air traffic growth globally has been noticeable. India is in the cusp of becoming fastest growing air traffic hub for a number of pro-active steps taken by the Government of India. The Central government is trying to use India’s presidency of G-20 to resuscitate “Incredible India” programme. Odisha can exploit this situation. The State’s promotion of global hockey tournament will be additional contributing factor in drawing substantial number of tourist traffic. Meanwhile, the State has taken steps to encourage direct flights to Dubai, Bangkok, and Singapore. Further, successful UDAN programme has enhanced connectivity within the State in addition to connections with Metros.
Odisha can promote rural tourism with existence of immense potentialities across the State with improved road network and continuous effort to improve rail traffic. This would generate employment in the rural areas with establishment of hotels, restaurants and shopping centres. Thus handloom and handicraft sectors would flourish. The spread effect of both agriculture based MSMEs and rural tourism will be immense. Educated and skilled young people looking for gainful employment will be benefitted, in particular in the rural areas.
Access to Bangkok and Singapore will create an opportunity for the businessmen of Odisha to trade with South East Asia. When Air Asia was flying to Kuala Lumpur from Bhubaneswar before Covid lockdown one could see marked movement of young entrepreneurs visiting Malaysia as tourists and exploring trade opportunities.
ASEAN group of countries, particularly Indonesia with its buoyant economy would provide a window for traders of Odisha to explore opportunities. Bali’s historic connection with Odisha is very well-known which can be source of two-way tourist traffic. Starting with a trade delegation to Indonesia from Odisha and then followed up to Malaysia, Vietnam and Singapore would pave the way for vibrant trading business.
Financial literacy is one area which the government should not neglect. Innocent people have suffered in the past due to fraudulence. Investment in publicly traded stock, bonds, and mutual funds is negligible in comparison to saving rates in the country. During the pandemic while growth of economy suffered stock market was booming not only in the developed economies but also in India. Taking advantage of this many young engineers not getting employment joined the stock-market. In the State conscious effort should be done to educate people on stock market.
Budget in the constitutional sense is only annual estimate of income and expenditure. In the modern holistic sense it has a wide meaning covering the whole gamut of economy, politics and society having long term implications and it is a part of perspective planning process.
*The author is a former bureaucrat and held important positions in aviation and power regulatory body. He can be reached through e-mail at [email protected]
DISCLAIMER: The views expressed in the article are solely those of the author and do not in any way represent the views of Sambad English.