Some ideas for the budget

News: Budget serves as an appropriate way in the hands of government through which it can shape the nation’s destiny. Article presents with ideas for the upcoming Budget.

What are the reforms that the government needs to take in the upcoming budget? 

1) Free Trade agreements: Impact of the reforms like GST, IBC, and labor codes etc, can be considerably enhanced by improving access to the world markets for entrepreneurs and exposing them to global competition via Free Trade Agreements (FTAs).

– FTAs with EU, UK, Canada, Australia and the UAE will serve our economic interests as well as our geopolitical objectives. 

– Duty-free access for Indian products to these large markets would accelerate growth. 

– These will also help in countering China’s growing influence in the world and specially in Asia. 

2) Introducing some changes in the SEZ law: This would make Indian manufacturing firms globally competitive.  

– Firms within SEZs need to be given the right to lay off the workers after due compensation. This would contribute to the emergence of large-scale forms in labor-intensive sectors in SEZs.  

3) Need to bring some of the very high custom duties down: This unjustifiably punishes the buyers while highly inefficient producers. 

4) Education: Govt should bring Higher Education Commission of India (HECI) Act that was promised in the budget of 2019-20. Bodies such as All India Council for Technical Education and National Council for Teachers’ Education should be subsumed in HECI.

– India needs to give similar autonomy to at least its leading colleges and universities like that given in the UK on which we have modelled our education system.UK abolished its own University Grants Committee in 1983. 

– India must open the door to foreign universities to establish campuses on its shores and to domestic institutions to do the same abroad. 

– Finally, research should be moved to universities from the councils, as they have not been very effective. 

5) Disinvestment: The government has been setting very huge targets for disinvestment and consequently failed to meet those targets. For instance: In the Union Budget for 2020-21, the target was Rs 2.1 trillion, and it was missed by almost Rs 1.8 trillion. 

– The government needs to detach the disinvestment and privatisation programme from the year-to-year fiscal needs. 

– It can introduce an institutional set-up which identifies the companies for privatisation on some set rules and standards, and not on the basis of the revenue they are likely to bring in. There is also a need to improve the standards and quality of their paperwork to the levels expected by private sector bidders. 

Source: This post is based on the articles “Shortfalls again,” published in Business standard and on “Some ideas for the budget” published in Times of India on 4^th Jan 2022, respectively.