February 3, 2019:
We will have to produce 50% of oil needed as also gold, coal, uranium and iron ore.
The interim budget for FY-2020 is big on vision & big on delivery. In one stroke, it aims to address the stress in the farming sector, provide social security cover to the unorganised sector, & put more money in the hands of our tax-compliant middle class.
The government must be applauded for presenting a holistic budget with an aim to boost India’s consumption story while keeping a firm check on inflation.
The budget unveiled a series of measures to address various facets of India’s economy & was not limited by the fact that this was the last budget of a government before 2019 general elections. To my mind, reforms are a continuous process & governments can continue with such ideas & thoughts to take India’s growth story forward.
The farm package under ‘Pradhan Mantri Kisan Samman Nidhi’ was the need of the hour to provide relief to small & marginal farmers in the country. The farmers have been battling several challenges, including drought in some pockets, rising input costs, erratic climate & lack of adequate remuneration for their output.
The announcement to provide direct income support of Rs. 6,000 per year for cultivable land of up to 2 hectares will provide assured supplemental income to the most vulnerable farmer families.
Another significant takeaway is the social security net for the unorganised sector. Finance minister Piyush Goyal was spot on when he said half of India’s GDP comes from the sweat & toil of 42 crore workers in the unorganised sector, working as street vendors, rickshaw pullers, construction workers, rag pickers, & domestic helpers. These critical cogs in India’s economic wheel get no support from the formal economy.
I wish to compliment Prime Minister Narendra Modi for arriving at a comprehensive social security cover for this segment of the society, where they will receive a pension of Rs 3,000 per month from the age of 60 & they need to contribute only Rs 100 per month till the age of 60 years.
Beyond these immediate relief measures, the budget also drew a comprehensive outline & identified 10 core areas to build a New India by 2030. This vision perfectly complements the government’s mission to make India a $5-trillion economy in five years & a $10-trillion economy in eight years.
The 10 dimensions range from building robust physical & social infrastructure for ease of living to expanding rural industrialisation, taking digital economy to all sectors, & lead the world in transport revolution through electric vehicles, renewable energy & energy storage devices.
If future governments start to implement this vision with right policy measures, India will be firmly on track to be a developed nation in the coming years.
However, it is critical that igniting the engines of growth on multiple fronts does not suffer from paucity of finances. Further, the government must ensure that the poor, the marginalised, & the rural economy are not left out even as the rest of the nation moves to the new orbit of development. Thus, social sector schemes must continue to help these sections of the society raise their standard of living.
All this will require copious amounts of funds. It is here that the government must add an 11th dimension to its multi-pronged approach — monetise what is below the ground.
While our natural resources sector across metals & minerals hold tremendous potential, we cannot think of eradicating poverty if we import 85% of oil. We have to produce 50% of oil in this country. Same applies to anything below the ground, whether it is gold, coal, uranium or iron ore.
An all-round development of India’s natural resource sector will not only generate sufficient funds to boost various social sector programmes, but also generate a large number of jobs, create a vibrant & supporting ecosystem of processing units & SMEs, & usher in prosperity & quality life across the length & breadth of the country.
It is high time the government focused more on under-the ground exploration, not only to drive self-sufficiency & cutting dependence on imports but also to propel Indian economy towards the $10-trillion mark.
By Anil Agrawal, Executive Chairman, Vedanta Resources Source Link