Vibrant Expectations from the Dynamic Government

(By Priyank Agrawal)

As the new Finance Minister gears up for presenting the Union Budget next Thursday i.e. on July 10, 2014 of the newly formed Government that has just completed 30 days few days back, it may be a challenging task for him to meet the expectations of the people as individuals and various corporate firms. The budget will also be an important indicator of how forcefully the    Government intends to translate the given strong public mandate into actions that will put India’s economy back on track. Marathon meetings with various stakeholders have been held and the suggestions made during them will be taken into account. The ongoing Iraq conflict and weak monsoon will prove to be one of the challenge for the Budget Planning. Bold decisions, as there is relative ease in decision making would surely be evident in this Budget.

We might think, why has the stock markets have risen so heavily? Is it due to the fact that the markets have believed India has voted in a more business-friendly government that will boost the national economy and started a reform-minded administration that will take tough decisions, get infrastructure development underway and support growth. The question shall be answered on the budget day. Various speculations has already been in news be it on imposition of various duties, taxes, subsidies or allocation of funds in particular sector.The priority sectors expected are Healthcare, Information Technology, Infrastructure, Banking, Automobile and Real EstateDevelopment.

Firstly, the investors would want to see tax reforms. Many foreign investors in India have been deterred by tax disputes, with Vodafone being a prominent example. Implementing retroactive tax measures; foreign investors would welcome an assurance that the government will respect tax laws that are already in place. On top of that, there is the expected Goods and Services Tax: the budget is expected to include a clear plan for its implementation and collection. Reducing barriers to trade in goods and services and easing barriers to foreign investment would create more choices for consumers and more sources of financing for firms.

Secondly, there is a need felt to boost the Indian infrastructure. It is said that the last government lost power partly because of its inability to get stalled projects moving again, and this one will be judged on its efforts to improve the situation in development of ports, roads and power supply. This point may not be necessarily pivotal to this budget, but it act as a surprise if the budget announcement did not accompany by a pledge to improve project completion.

Third, like earlier budgets, this one is also expected to announce the direction of new spending. Will it go on subsidies or on building strong infrastructure, providing better healthcare and quality education? Reducing subsidies may be difficult particularly in a country with deep and entrenched poverty. Yet we expect that necessary actions on it may also be taken. Government has already indicated that the prices of LPG cylinders and kerosene would not be increased this time, but let’s wait for official declaration.

Fighting inflation will be a priority, since persistence of high inflation can quickly erode the trust of people. The Government can take reference by RBI’s actions and can reinforce the confidence by emphasizing supply-side measures that boost investment and productivity. The supply and distribution of food, in particular, needs improvement through reforms of agricultural and land policies.

The budget is also expected to have a clear indication supporting the RBI’s efforts to free up financial markets and develop broader sources of financing, especially corporate bond markets, to meet India’s needs for long-term finance.

Finally, and vitally, the budget is expected to provide impetus for job creation. This might include tax breaks for factories, or measures to create a more skilled workforce.

The thing is, the expectations have been built up so much that even the slightest hint of slow progress may lead to disastrous impact on the functioning of Government and faith entrusted on it. The long-term future may be bright for both India and its political ambitions, but it is going to take something special to sustain it and this budget will surely the pave for all Indians. No one is expecting miracles overnight but actions are as important as words in building credibility on reforms.

• About the Author

About Priyank Agrawal

Always believe in myself and have never say die attitude in life. I firmly believe in destiny. I believe that the reasonable man adapts himself to the world; the unreasonable one persists and I am here to prove that I am the reasonable one. Always trying to learn from my mistakes. Learning new things is my passion. A person comes empty handed and leaves the same way so living every moment of life with all the happiness around. I am an avid reader, enthusiast movie watcher, passionate about music, love to watch cricket. Born and brought up in Ahmedabad with native in small town named Nawalgarh in Rajasthan, I completed my graduation in Computer Engineering. Within few months opted for MBA in order to climb the professional ladder swiftly and worked in Gujarat Industrial Development Corporation and Sardar Patel Institute of Public Administration.