Budget Focus On Jobs, Welfare and Infrastructure | Budget 2024 | NDTV Profit - video Dailymotion

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00:00Good evening and welcome you are watching NDTV Profits special broadcast on the budget.

00:22I'm Nupur Talwar Suri and to discuss the budget in detail we are now joined by Prachi Mishra

00:28the former Chief of the Systemic Issues Division of the IMF.

00:32Good evening Ms. Mishra, thank you very much for joining us.

00:35Pleasure to be here Nupur.

00:37Right, Ms. Mishra to begin with the big thrust today from the government was on job creation.

00:43It was all about jobs, jobs and jobs and the government essentially has also found you

00:48know innovative ways to deal with it with incentives announced for job seekers and employers

00:54as well.

00:55Now, the economic survey also Ms. Mishra has flagged employment generation as a key

01:01focus area.

01:02Do you think that this marks a shift from the previous years in terms of a greater and

01:08sharper focus on employment and how far do you think it will go in solving this?

01:15Thank you Nupur.

01:16I think you know first let's look at the big picture.

01:21I think to me the highlight from the budget is really the fact that you know it's a responsible

01:28budget.

01:29You know the fiscal deficit is projected at 4.9% of GDP FY25 and this is a large 0.9 percentage

01:39point correction relative to FY24 and in fact if you look at the last four years it's 1.8

01:47percentage points and this would in fact be you know the largest annual reduction which

01:52we've seen in since 2013 excluding the post-COVID normalization and this is in despite this

02:01queue in towards capital spending which we've been seeing consistently.

02:05So to me this you know this is very important and it's you know the fact that the finance

02:13minister noted very emphatically the plan to bring down the deficit further to 4.5%

02:19and then she emphatically mentioned the goal to bring sovereign debt on a declining path

02:23as a percent of GDP.

02:25To me this was the most striking part and you know of course you know there are several

02:32ways in which you know the budget tries to focus on you know the employment issue carrying

02:41forward the theme of you know a theme from the survey as well.

02:47So I think the way it I would say that you know the fact that you know it is prudent

02:53you save resources and you can use these resources for several you know several objectives including

03:00raising employment or pushing certain sectors but I also found the budget balanced in the

03:08sense of you know trying to include the youth, trying to include women, I think this was

03:15trying to include agriculture, I think half the eligible population in our country is

03:22employed in agriculture.

03:24So the fact that you know the budget focuses so much on agriculture in fact in the finance

03:30minister's speech it featured right in the front itself you know suggests the importance

03:37of employment for the budget.

03:38Let me stop here, I am happy to take any questions.

03:41Absolutely, as you pointed out obviously you know agriculture as well as the distress that

03:47we have been seeing in the rural sector is something that was likely to be addressed.

03:51Now you were speaking earlier of fiscal consolidation, I just wanted to ask you the CAPEX has remained

03:57the same, many would have expected with the fact that the RBI surplus came in, it was

04:03a huge number, a large some part of it would have gone in CAPEX but that did not happen,

04:09why is that?

04:10What's your view on it?

04:11See capital spending to GDP has been on an increasing trend, so if you look at you know

04:16even FI compared to FI24 and FI25 budgeted, the capital spending to GDP is going up.

04:25You know relative to the interim budget it did not change and that's attracting some

04:28attention but if you look you know consistently it's been on an increasing trend, it's gone

04:33up by almost like one percentage point of GDP over the last four years or so and if

04:38you look at the ratio of capital to current spending in the budget, that has increased

04:43from like 18% you know four years ago, 21, 22 to 30% so I think there is this absolute

04:51continuity in the focus on capital spending in the budget, so I think there's no question

04:57about it.

04:59Right now one of the other themes that emerged was cooperative federalism.

05:04Now this of course includes the interest free loans that were given to states for infrastructure

05:10building allocations of course to Bihar and Andhra Pradesh which is you know balance of

05:15politics as well but largely is cooperative federalism seeming to you to be a big focus

05:21area going forward given that this is at the end of the day a coalition government?

05:27I think you're absolutely right Nupur because I think if you look at as you pointed out

05:37you know the flip to states to encourage them, to nudge them to engage in capital spending,

05:45this budget announces about 1.5 lakh crore for capital spending as a 50-year interest

05:51free loan so it's effectively a grant and should enable states to utilize these resources

05:55especially in critical areas such as health and education.

05:58These are all you know concurrent subjects under the seventh schedule of the constitution.

06:04The issue is that states have not used these additional resources.

06:08It's quite ironical because you know the states are unable to spend on capital outlays and

06:15this provides room you know fiscal room to the center so it's a bit you know counterintuitive.

06:21I think as the economic survey correctly pointed out I think the goal of Mixed Bharat can really

06:25be achieved through you know collective compact and states have to be an integral part of this

06:31compact because you know so many important topics like agriculture, health, education,

06:38most of these are state or concurrent subjects.

06:42And finally coming on the issue of you know additional allocation for the states,

06:48Bihar, Andhra Pradesh, Assam, you know flood-ridden states.

06:52I think this is really important.

06:54I think this is the budget is taking a step towards reducing interstate disparities by

06:59allocating resources towards you know particular states of Bihar.

07:03Bihar is a state with the lowest per capita income in India and you know when India gained

07:07independence an explicit government objective was to have a more egalitarian society coupled with

07:12you know balanced development of different regions.

07:14So active state intervention was really envisaged to reduce you know some of these disparities.

07:19So I think the budget through allocations for poorer states or you know flood-ridden states

07:24really moves the needle in the right direction to fulfill this vision.

07:28So I would say you know the budget tries to strike the right balance between being responsible

07:33but at the same time being balanced and inclusive.

07:37Right and what's your view on the MSME sector?

07:39A large boost seems to have been given.

07:42The limit for Mundra loans has been increased.

07:45Also a credit guarantee scheme has come in for MSMEs in the manufacturing sector.

07:50In fact the manufacturing sector there seems to be a significant thruster on that.

07:55Yeah I think again you know manufacturing sector it relates to the overall you know goal of

08:02increasing employment and I think the idea is to you know give push to labour intensive

08:11manufacturing to increase you know to boost employment as well.

08:15And while we always talk about you know bigger factories and you know employment in fact

08:20the economic survey showed that in fact in the bigger factories more than 100 workers

08:25you know ASI annual survey of industry suggests about a 4% you know increase in employment.

08:32I think a big part of the budget and also a team carried over from the economic survey is to

08:37give a flip to these MSMEs.

08:40And as you rightly pointed out I think increases in demand and approval of credit guarantees to

08:46MSMEs under the CGT MSC scheme.

08:48I think all this is you know all this is very you know very welcome development you know

08:53further leveraging the digital footprint of MSMEs in the economy.

08:56And you know going you know have them because they don't have proper credit assessment to

09:01help them cover those without formal accounting systems.

09:05I think and you know doubling of MUDRA loan limits on the condition of successful

09:10repayment of previous loans is also you know welcome tone.

09:13Overall I think the survey also pointed out a number of you know low hanging fruit

09:19to deregulate the MSME sector.

09:21So I'm hoping while these are not explicitly mentioned in the budget these would be also

09:26on the cards for implementation of smaller things like you know there are restrictions

09:30on land, there are restrictions on parking spaces, there are restrictions on women to

09:34be involved in MSMEs.

09:36So all this I think I'm hoping that you know what was in the budget is very welcome and

09:41more than that will be implemented over the course of the year.

09:44So MSMEs you know boosting the MSME sector should be a key part of you know the long

09:51term vision for Vixen Bharat.

09:53Right and Prachi final question there were obviously a lot of things that the budget

09:59did address but according to you what was the one thing that there should have been

10:03more focus on?

10:05There is a lot of talk about of course the implementation of the labour codes now that

10:09did not come through in this budget.

10:11So what according to you is the one big miss?

10:14See I think you know budget need not be you know this is budget can signal reforms and

10:20signal the direction but reforms can happen outside the budget all the time.

10:25So of course you know land and labour are both critical inputs to production and while

10:31we did see by the way some you know some reforms on related to land for example the unique

10:38identification of rural and urban land records they are being introduced via this you know

10:43the unique land parcel identification number and in addition to better map digitization

10:48on labour I did not see anything on labour but again I would not you know labour you

10:53know some of the reforms have already happened I think on labour a lot of the issues making

10:57it you know implementable throughout the country I think that is more and I hope that that

11:04is going to happen you know even outside the budget.

11:07I think one thing I would say that you know the budget you know two very critical sectors

11:13in the you know in route to Vixen Bharat are health and education and on education I think

11:17the government has made education and scaling a huge priority allocated 1.58 lakh crore rupees

11:23you know provisions for education loans up to you know 10 lakhs for each student basically

11:29students who are pursuing higher education in Indian institutions all those are you know welcome

11:33moves but you know overall if you look at the allocation towards both health and education

11:41it is almost flat relative to previous years and also very low in international comparison

11:47so again health and education are areas where I would you know I would expect you know a lot

11:54to happen even outside the budget you know we were you know if you think about higher education

12:00I think India you know you know just like India is the pharmacy of the world India can also

12:07you know with a glorious past can be the university of the world so I would say that

12:10you know despite some of the encouraging steps more can definitely be done and I hope

12:17a lot will be done outside the budget absolutely so as you're pointing out health and education

12:21perhaps you know our focus areas that the government will continue to work on thank

12:25you very much for joining us this evening and sharing your views thank you thank you

12:29no for my pleasure all right you are watching NDTV profit special broadcast on the budget

12:36we slip into a very short break on the other side we bring you more stay with us

12:56you

Budget Focus On Jobs, Welfare and Infrastructure | Budget 2024 | NDTV Profit

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