The current climate of natural resource supply-demand imbalance and aspiration-affordability imbalance create a unique opportunity for the government to usher in a plethora of new game-changing programmes and ensure a sustained growth of the economy. The implementation of a few ideas listed here, some of which are already in the pipeline, could provide the required momentum.
The introduction of the Direct Taxes Code and Goods and Services Tax should be implemented without any further delay.
Policies that create cycles of investment, innovation and sustainability should be encouraged. Subsidies should be targeted and focused to create such cycles.
As an emerging economic power, India needs to allocate resources to boost the social sector and trigger more sustainable growth. Since this would define the quality of outcome, it is required more in health and education sectors.
A key cross-cutting theme on policy framework is to reward good performers. There must be substantive rewards and incentives for companies delivering on energy saving, water conservation, affirmative actions, skill building, etc.
Information technology advancement can be leveraged to bring about change in the quality of governance. Whether it is allocating natural resources, or granting regulatory permissions, or even monitoring critical environmental performance at an establishment, information technology can address a majority of concerns associated with transparency of process.
The housing sector is a major driver for economic growth and generates countless jobs across various verticals and associated industries. So, enhancing spends on this sector is desirable.
More emphasis needs to be laid on the development of rail, roads and ports. Besides, supply chain efficiency — through more cold storages, agri-processing centres and warehouses — would minimise losses would boost productivity and growth.
For the chemicals industry, a focused implementation of Petroleum, Chemicals and Petrochemical Investment Regions would provide the benefits of co-location, networking and greater efficiency. A focus on this in the Budget could propel the industry and help it add another two per cent to the manufacturing growth rate.
The agriculture sector should get further boost through incentives for PPP investments, especially in skill building and farmer education, and extension services would be a welcome move. Reallocation of even a minor amount of the five per cent of the fertiliser subsidy bill towards this could be a game changer.
A higher allocation of subsidies towards high-quality seeds and micro-irrigation would boost agri productivity. Besides these, fertiliser subsidies should be targeted towards small and marginal farmers. This move should be coupled with linking fertiliser pricing to market mechanism, especially in urea, where farmgate prices have been stagnant. In addition, the government could give boost to investment in the urea sector by announcing the New Investment Policy and domestic gas allocation for this important agricultural input.
R Mukundan
Managing Director, Tata Chemicals
