New Delhi: Raghuram Rajan, former Governor of Reserve Bank of India (RBI) and former Chief Economist of IMF, has given suggestions to Finance Minister Nirmala Seeraman before the budget. Rajan said that instead of dreaming of rapid economic growth with the help of only agriculture and manufacturing, we should focus on other sectors. There is a need to take some strict steps in the budget to bring the economy back on track from Corona.
In an interview with the English news channel ET Now, Rajan said that India should immediately abandon the traditional practice of budgeting. His reference is to the proposals coming for different sectors in the Union Budget every year. Rajan says that the current economic situation of the country is neither too pessimistic nor too optimistic.
The former RBI governor said that a vision is needed in this year’s budget. The budget document should not only talk about increasing the tariff and reducing the subsidy. This should be the vision document for the next five years. There may be slight variations in it every year, but this vision should be permanent.
Big decisions in the budget
Raghuram Rajan said that the Indian economy is now standing at such a juncture where it needs to take big and tough decisions to give direction. The coming budget can be the right opportunity to do this. There is a need to change the policy for fast economic growth. Actually, bitter medicine is necessary for the economy suffering from Corona. We have to stop following the path of Incremental Budgetary Policy soon.
Focus on farming will not make a point
The former governor of RBI said that it is not right to focus only on the agriculture and manufacturing sector in the budget for our economy. There are many other such sectors, which have a lot of potentials to accelerate the economy. We have to focus on new areas like telemedicine, tele-layering, and edutech. The industry associated with them not only needs funding but should make global standards for data protection for them. The country should start thinking about services, which have a lot of potentials to accelerate development.
High spending does not guarantee growth
Rajan believes that the most important thing at this time is to maintain the trust of the common people and the market. For two years, the corona epidemic has caused a big hit to the economy. In such a situation, it is a challenging task to get the economy running again on the track of development. This work cannot be accomplished by simply spending more.
Measures to increase demand in the budget
The former RBI governor says that at this time it is necessary to focus on measures to increase demand. The central and state governments should make infrastructure their priority. State governments should make efforts to create small jobs. Infrastructure development will create small employment opportunities. There is a dire need for such employment at this time. Apart from this, it is also necessary to take measures to increase the demand for things like steel, copper, cement.
Focus on weak sector
Raghuram Rajan said that there is a need to focus on such sectors in the budget whose performance is weak. Emphasizing increasing the funding for MNREGA, he said that creating employment opportunities is a challenge as well as a necessity.
