Experts debate 2024-25 budget: Focus on improving rural income, employment and agricultural productivity

The 2024-25 budget has sparked a debate over whether enough is being done to put the economy on the intended high growth path in the medium and long term, and what more needs to be done.

In a panel discussion on ‘Decoding the 2024-25 budget’ organised by the hindu business lineexperts analyzed various sectors – from agriculture to the stock market – to devise solutions to maximize well-being and growth.

Food and fertilizer subsidies

According to Ashok Gulati, a professor at ICRIER, there can be no revolution in manufacturing in India unless there is mass demand.

“Only the top 15-20 percent of the population has purchasing power. And there are only so many televisions and cars they can buy. Unless we increase the income of the rural masses, this issue of output growth one year at 8 percent and then down again will continue,” he said.

Gulati said that to increase the efficiency of the food and fertilizer subsidy system, food stamps and digital fertilizer vouchers could be given. “Why give food subsidies for just rice and wheat? By giving food stamps with more options to choose from, you save a lot and give more nutrition to the people,” he said.

He added that providing digital coupons to farmers for soluble fertilizers can increase efficiency from 30 percent to 90 percent.

Focus on employment

The focus on employment and employability is definitely something that stands out in every aspect of the budget, said Jyoti Vij, DG, FICCI. “In our interactions with the government over the last few months, the story that I see is that there is a lot of focus on employability. If you are able to create employability and work with the industry across the skill development programme, I think we get a very holistic approach,” she said, adding that there was a lot more outreach from both the government and the industry.

On the budget proposal to expand internship programs using CSR spending, Vij said it was a smart way to use the CSR program to bridge the skills gap. “But the most important thing would be how quickly we are able to create employable youth and collaborate in this space.”

About tax increase

On the hike in long-term capital gains tax from 10 per cent to 12.5 per cent in the Budget, A Balasubramanian, MD and CEO, Aditya Birla Sun Life AMC Limited, said the existing tax rate structure has been simplified and the possibility of paying an additional 2.5 per cent tax is much greater today given the healthy growth in corporate earnings and stock prices.

The provisions on agriculture in the Budget focus on four strategic issues — productivity and sustainability, self-reliance and resilience and diversification, said Sitikantha Pattanaik, chief economist, NABARD.

He pointed out that in the past, agricultural growth came from inputs, but now most of it comes from productivity.

“If India’s per capita income is going to increase eight times, GDP nine times and population is going to increase to 6.5 billion, as was specified by a Niti Aayog last week, we have to rise to that challenge. We have to prepare for that too,” he said.

“To think about productivity in agriculture, we need to take three measures together… One is a review of the research that has been set up. The second is the establishment of digital infrastructure in agriculture. The third is that a new cooperation policy is announced,” he added.