IIM-K economist lauds ‘growth-oriented’ budget

Rudra Sensarma, Professor of Economics at the Indian Institute of Management Kozhikode. | Photo Credit: Special Arrangement

Welcoming the Union Budget for 2023-24 presented by Finance Minister Nirmala Sitharaman as progressive and positive, Rudra Sensarma, Professor of Economics at the Indian Institute of Management Kozhikode (IIM-K) said the proposals had a clear focus on growth and job creation post COVID.

He told The Hindu that the Budget provided two kinds of stimulus to the Indian economy. “One is through income tax cuts for the middle class which will increase spending on all sectors and second is the higher capital expenditure of the government under which roads, railways, and other infrastructure will be created,” he said.

Prof. Sensarma said employment opportunities would be created with the increase in public and household spending. “Additionally, the support to Skill India announced through the PM Kaushal Vikas Yojana 4.0 will provide industry 4.0 skills like coding, AI, and robotics. The apprenticeship promotion scheme will provide direct benefit transfer to apprentices,” he observed.

He said there was a significant increase in allocation to sectors such as energy, telecom, and defense. “The International Monetary Fund has projected a global growth slowdown in 2023. Therefore, it is important for the government to support the domestic economy,” he said. Another positive from the budget, he said, was the cut-down in subsidies for fertilizers and food which was expected as dependence on handouts has come down with economic recovery.

Prof. Sensarma said the Urban Infrastructure Development Fund for tier-2 and tier-3 cities was a welcome move as smaller cities were growing faster than metros in terms of income, gig economy, MSMEs and start-ups. “Upgrading their infrastructure will reduce pressure on metros and make it attractive to set up big industries in such cities,” he pointed out.

He said the 66% increase in allocation to PM Awas Yojana was aimed at helping build more houses for the urban poor. “It will benefit migrants who will have a home at their place of work. This will prevent the kind of exodus of migrant workers that happened during the pandemic. It will also improve their living conditions and, therefore, increase their productivity,” Prof. Sensarma said.

He added that the proposal for an agriculture accelerator fund would help agri start-ups in rural areas, and it was likely to have spill-over benefits for agricultural growth and farmers’ income.