To spend or not to spend, that is the question. As the announcements of Union Budget dawn closer, economy watchers in India and abroad have expressed numerous expectations, the youth being at the forefront in this too, apart from protesting against the government. The problematic numbers which are propping up on the economic front and the attempt by the government to scuttle them makes the situation even more precarious.
The youth are no different from farmers and businessmen. We, too, have aspirations and expectations, more so if we are students of economics. What follows in the subsequent paragraphs, is how an undergraduate student of economics perceives the union budget and what does the youth want. I promise to keep the technical jargon to its minimum.
How bogus is the claim of world class education if Rs 400 crore are allocated for a youth population of around twenty four crore below the age of 24 years? Yes, we start with what the youth of India are most concerned about, and that is not protesting, it’s education.
While I would give it to the government for trying to get the Higher Education Commission Bill passed, perhaps, it was not as important as the Citizenship (Amendment) Act, 2019. The government must realise that the youth in India are highly aspirational and have proven their excellence despite minimal resources.
Almost all developed nations stress on the importance of research. I was delighted to hear about the National Research Foundation, but unfortunately it has not materialised either. I hope ‘focus on education and research’ does not become the ‘Garibi Hatao’ of the twenty-first century.
The finance ministry must focus on establishing institutes of repute in, not just the metros, but all parts of India. Here, it must be noted that the government has made a decent attempt at establishing IITs and AIIMS but has failed to noticeably work in the non-STEM sector. The government needs to increase its investment in primary education, it is far from its manifesto target of 6%.
The Higher Education Finance Agency (HEFA) is mired in problems and obsession of government with Science, Technology, Engineering and Management (STEM) institutions is misplaced. The focus needs to be on investment in the social studies sector at the undergraduate and graduate level. STEM alone cannot even create enough jobs, let alone human capital. Also, as someone who has followed the Indian polity for a considerable time, governments are mostly reactive in nature, seldom pro-active. The future lies in AI, machine learning and big data, and the government cannot afford to be reactive in this sphere because they are so dynamic that if you do not start early, you may not ever catch up.
The latest State Bank of India ‘Ecowrap’ report states that there are going to be 16 lakh lesser payrolls (or jobs) in 2020. That sounds extremely scary given that I, and many other young folks, would step into the job market next year.
Even at high growth rates in the past, India was never able to create abundant jobs. The challenge remains the same now, just that the rate of growth, according to the statistics of the government itself, is less than 5%. The gap between the growth rate required for fulfilling aspirations and the actual, is rising.
Apart from the various other structural initiatives spelt out by numerous authors, one aspect of definite focus should be the Micro, Small and Medium Enterprises sector. As per the ‘MSME at a Glance’ Report of the Ministry of MSMEs, the sector consists of 36 million units and provides employment to over 80 million people. The Sector produces more than 6,000 products contributing to about 8% of GDP besides 45% to the total manufacturing output and 40% to the exports from the country. The potential of this sector has not been realised.
But, can all this happen in a bad atmosphere? Just like polluted air affects the human body, uncertainty and pessimism affect the economy. As the British economist John Maynard Keynes put in the The General Theory of Employment, Interest, and Money (1936), animal spirits are the emotions that affect consumer confidence.
If spirits are low, then confidence levels will be low, which will drive down a promising market—even if the fundamentals of the economy are strong. At the risk of deviating, I will stick my neck out and say - they say we are the future, but do we want to be, given that we are called out as dumb and lathicharged if we speak up? Might as well contribute to some other economy that values us more. Madam Minister must focus on re-establishing trust, whether in industrial houses, or startups, or the bright minds of the youth.
Penultimately, the other facets to look for creative announcements would be e-commerce, import duties, telecom, capital gains tax, tourism and disinvestment, whether left or right, whether demand side or supply side, this budget needs the right mix of all.
In conclusion, the problem with the Indian nation has seldom been planning and creativity and has often been implementation; to stop leaks, to stop fraudsters and to give impetus to honest and upright businessmen apart from not risking the alienation of youth.
The focus should be shifted from the relatively inconsequential transitions like the one from briefcase to bahikhata to the transitions like the one from a booming bureaucracy to booming business. This budget would, probably, be the one where the Finance Minister would be a tightrope with numerous expectations on the balancing bar as we watch this momentous budget, all we can do is wish her the best.
(The writer is a Fellow at the Policy Research Initiative and an economics major at Hindu College, University of Delhi. He can be reached at [email protected] or on Twitter @naitikmuley)
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