Page 10 - EW February 2025_Neat

Editorial

BUDGET WE NEED & BUDGET WE'LL GET our calculation, these measures will
enable the Centre to save and mobil-
ise an additional Rs.7-8 lakh crore per
y the time readers of this sui reduce expenditure. As recited in year. This amount should be invested
generis publication which re- our review of last year’s Union Bud- in public education and health, the
Bcently crossed the milestone of get 2024-25 (EW, August 2024), the prerequisite of a great productivity
25 years of uninterrupted publishing market value of Central government leap in Indian agriculture, industry
read this editorial, the Union Budget PSEs is estimated at a humungous and the services (see www.education-
2025-26 will have already been pre- Rs.22 lakh crore. If these 256 legacy world.in, EW August 2024).
sented to Parliament and the public white elephants are auctioned over Although this is the bold, break-
by long-tenured Union finance min- the next two years, it would substan- away budget we need, the budget we’ll
ister Nirmala Sitharaman. tially stabilise the Government of In- get is likely to tread a familiar path.
With the annual rate of GDP growth dia’s finances. On the positive side, the BJP/NDA
unlikely to exceed 6.5 percent and the In essence, the finance minister’s government’s outlay for infrastruc-
rate of inflation forecast at 5.3 percent remit is to increase the government’s ture — a force multiplier — at around
in 2024-25, in real terms the revenue revenue to fund expenditure neces- 25 percent of total expenditure is
of the Central government is likely to sary for governance and economic likely to be maintained. After allo-
remain flat. A readily available op- development. Therefore, apart from cations for establishment expenses,
tion is to auction a large number of substantially augmenting revenue by interest payout and defence, the pif-
the Centre’s 256 mostly loss-making biting the bullet on the issue of pri- fling remainder is likely to be spread
public sector enterprises (PSEs) to vatisation of PSEs, it’s high time that over on-going projects in all sectors of
boost revenue and also enable it to she also applied her mind to reduc- the economy — amounts too small to
retire debt to reduce the Centre’s huge ing the Union government’s establish- make a difference to the vast major-
annual interest payout (Rs.11.62 lakh ment expenditure which consumes 16 ity of citizens leading miserable lives
crore out of its total budget revenue of percent of the Centre’s budget; slic- at the bottom of the country’s iniq-
Rs.48.21 lakh crore in 2024-25). But ing non-merit middle class subsidies uitous pyramid. Instead, it might be
despite the professedly pro-private (higher education, electricity, piped better for the FM to make bold policy
enterprise BJP having been in office water etc); reducing the constantly announcements relating to freeing
at the Centre for over a decade, it has rising interest payout burden of the MSMEs from licence-permit-quota
failed to avail this win-win option to Government of India through the raj and permitting high street bank-
boost revenue and simultaneously sales proceeds of PSEs. According to ing (see below).

TIME TO PERMIT HIGH STREET BANKS GDP against the global average of
148 percent, 192 percent in the US,
180 percent in China, Korea’s 176 and
he dip in india’s gdp growth rate Numerous reasons have been ad- 126 percent in fast-track Vietnam.
in the third quarter (October- vanced by critics and independent Heavily bureaucratised banking has
TDecember) to 6.2 percent came economists for slowdown of the stymied the growth of India’s all-im-
as a great disappointment to monitors economy from 8.2 percent growth portant MSMEs.
of the Indian economy and citizenry. in 2023-24 despite an upsurge in As an antidote, there is urgent
This disappointing performance agriculture output because of a good need to permit promotion of High
against earlier forecast of 7.5-8 per- monsoon this year. Among them: Street banking. In essence, high
cent has prompted the World Bank slow pace of economic liberalisation; street banks are deposits-taking and
and IMF to revise their forecast for weaponisation of tax enforcement lending institutions promoted by suc-
fiscal 2024-25 to 6.2-6.5 percent. agencies; GST tax law complications; cessful local businessmen. They tend
Although government spokesper- continued unease of doing business to be well-informed about their local
sons maintain that India’s economic which has discouraged private sector communities, about which small busi-
growth rate remains the highest investment. nesses are doing well and need capital
worldwide, given that it was stuck in Yet the dismal record of the bank- to expand and grow. They proactively
the 3.5 percent per year rut for over ing sector dominated by the country’s reach out to high-potential businesses
30 years (1960-1990), there is a lot of nationalised banks to advance ad- and offer loans and assistance. India’s
ground to make up and 6.5 percent equate credit to industry, agriculture registered NBFCs are halfway there,
per year is insufficient. India’s GDP and services hasn’t been sufficiently but they aren’t permitted to accept
needs to grow at more than 8 percent highlighted. Especially to MSMEs deposits. Therefore, awaiting dena-
per year if the country is to break (medium, small and micro enter- tionalisation, there is urgent need
out of the ‘middle income trap’ (per prises) that account for 40 percent of to permit deposits-taking and lend-
capita income of $12,500 cf. $2,500 India’s GDP, 70 percent of industrial ing high street banks promoted by
currently) and attain Prime Minister workforce, and 50 percent of exports. well-established businessmen who
Modi’s Viksit Bharat and $30 trillion It’s shocking but true that annual have the trust of their communities,
GDP (cf. 3.5 trillion currently) goals credit advanced by India’s ultra- to fund MSMEs. American industry
for the year 2047 when the nation will conservative banks to private indus- and its globe-girdling banks were
celebrate its century of independence. try aggregates a mere 50 percent of built this way.

10 EDUCATIONWORLD FEBRUARY 2025