Spending money on building infrastructure to create jobs, and not handing out doles, marks the new normal
Budget 2017 was an outstanding statement of the Narendra Modi-led central government’s intent on where it wants to take the Indian economy.
Through the provisions announced in the budget, finance minister Arun Jaitley effectively re-emphasised what has become the new normal for the Indian economy, which is now being based on policies rather than on discretion.
One of the key highlights of the budget was the absence of any kind of populism, which could have been a temptation easy to succumb to, given that elections are underway in various states and more are scheduled for later this year.
The government has rightly decided to base its budgetary provisions on fiscal prudence and Jaitley’s articulation of the government’s intention to stick to a fiscal deficit target of 3.2 percent in 2017-18 and 3 percent in 2018-19 was encouraging.
Votes notwithstanding, the government judiciously ensured that it didn’t go overboard in spending, and avoided incurring any expenditure that could have had a major impact on the country’s finances.
Rather than giving out doles, the government directed its expenditure programme towards overheads that will help create jobs and boost overall economic growth.
The significant expenditure of Rs 3.96 lakh crore towards creating physical and digital infrastructure—both in urban and rural areas—will definitely give a boost to core industry, which in turn will help generate employment and boost the country’s Gross Domestic Product (GDP).