Economists: No strategy to tackle major challenges

Bengaluru, NT Bureau: Economists expressed disappointment with the Budget presented by Union Finance Minister Nirmala Sitharaman on Tuesday, adding that it lacked strategy to address major challenges like unemployment, inflation, farm distress, lack of demand and the like.

A report by Centre for Monitoring Indian Economy (CMIE) had revealed that the unemployment rate was eight per cent for the 2023-24 financial year. Economists found it “unusual” that the Centre introduced sops like Rs 5,000 for an intern for three months, adding that such allowances were reserved for unemployed youth.

Noted economist Narendra Pani said that more could have been done to tackle issues such as joblessness. “There is no clear strategy implied in the Budget. There are some priorities laid out and there are ad hoc payments here and there but there is no macroeconomic strategy,” he added.

Development economist Jayati Ghosh echoed these sentiments, and said that the measures suggested would fall short of boosting domestic demand.

“The problems of unemployment, inflation, farmer distress, viability of small and medium enterprises, and climate change – the central problems of the Indian economy – have not been addressed,” Ghosh said. 

“The budget does not address any problems. While the government has been forced to recognise that these are problems, it is unwilling to do the kind of change and strategy necessary to actually address the problems,” she said, adding that public employment would provide some relief.

Hike in taxes noted

Tax for Short Term Capital Gain (STCG) was increased from 15 per cent to 20 per cent and Long Term Capital Gain (LTCG) tax was hiked from 10 per cent to 12.5 per cent. However, the exception limit was raised from Rs 1 lakh to Rs 1.25 lakh. Pani noted the Centre had tied unemployment to subsidies.

“They’re giving subsidies to employers and they’re also giving subsidies to people who get their first job,” he said, adding it could be a political calculation.

Centre not forthcoming on MSP

Ghosh said that it was disappointing that there was no Minimum Support Price (MSP) announcement.

“There are tiny measures that are going to be a disappointment. I think farmers across India were expecting some kind of statement about formalizing the minimum support price (MSP) system, if not given a legal backing,” she said.