Prime Minister Narendra Modi who has just completed nine months in office, has been a lucky mascot for the BJP which got majority on its own in the 2014 Lok Sabha elections, belying the wild expectations of the Sangh Parivar.PM also generally claims that with his coming, acche din has arrived. Irrespective of the view whether Modi is lucky, the fact is that both the work of the UPA Government at reforms level in the last two years despite some amount of administrative paralysis and the external factors, especially the fall in the prices of international oil prices, have helped the Modi Government and the Finance Minister Arun Jaitley is presenting his second budget with a feel good factor in the economy.

For a Government which has comfortable majority in Parliament, the second year in office is especially important as the ruling combination is in a position to bring about reforms in the economy of a fundamental nature but this has to ensure that in the process, this does not entail additional burden on the common masses, especially the under privileged. The outcome of the recent elections to the Delhi assembly is a grim reminder to the BJP leadership that just taking care of the corporate sector’s demands in the name of reforms and growth and neglecting the grievances of the underprivileged, cannot be done any more as the aam aadmi have become more assertive and they are determined to see that their lot gets improved through the new measures taken by the Modi Government.

For Jaitley, that is a formidable task. And he can ignore that to the peril of the fortunes of the BJP. The Jaitley budget has to project a pro poor image while not being anti-business but at the same time, the scope is limited due to still not so comfortable fiscal position. Jaitley has the advantage of a low inflation and still comfortable international oil market but he has to take measures also for insuring the economy against international risk factors including oil prices and further accentuation of the crisis in Eurozone.

Thus the domestic factors, especially the coming elections in Bihar which is very important for the BJP leadership and the continuing opposition by the farmers to the land bill, are not giving free hand to the Finance Minister to go the whole hog for implementing new reforms measures in the 2015-16 budget. Rather one can expect that the process will be initiated and the ground will be made ready for more vigorous thrust in the next two years if the economy shapes well at the end of 2015-16.The growth estimates of over 8 per cent in 2015-16 is on expectations that the monsoon will be favourable as it was forecast to be normal, compared to last year and the survey suggests that in the short run, growth will receive a boost from cumulative impact of reforms, lower oil prices and likely monetary policy easing.

There is a measure of adequate confidence in the survey when it says that there is a clear political mandate for reform and a benign external environment now is expected to propel India on to a double digit trajectory. Indian economy appears to have now gone past the economic slowdown, persistent inflation, elevated fiscal deficit, slackening domestic demand, external account imbalance and oscillating value of rupee.

As a result, the survey’s view is that India can now increase public investment to drive growth without borrowing more. Jaitley has to give in the budget a big push to public investment, and that is the best way to pep up growth. In the name of reforms, there should be no move to restrict the operations of the public sector enterprises. There is need to start working on the stalled projects in both public sector and the private sector. The stock of stalled projects stands at 7 per cent of the GDP accounted for mostly by the private sector. Manufacturing and infrastructure account for most of the stalled projects. Changed market conditions and impeded regulatory clearances are the major reasons for stalling of private and public sector projects, respectively.

The private sector has much to explain for this performance. This has weakened the balance sheets of the corporate sector and public sector banks which in turn is constraining future private investment, completing a vicious cycle. The survey has also noted that the expectation that the private sector will drive investment needs to be moderated and in the light of the private sector performance, public investment may need to be stepped up to ramp up capital formation and recreate an environment to crowd-in the private sector.

Thus, the budget has to ensure a bigger role for the central PSEs, especially those which are the leading players and have expertise of international standards. The high level of public investment along with the more pro active role of the leading PSEs and activisation of the private sector will create a proper environment for achieving high industrial growth in the economy. In fact, this is the right time to do more public spending even if that means a bit higher fiscal deficit. A productive investment will yield quick results and that will be of big benefit to the fiscal health.

For the Modi Government, the primary task has to be the generation of jobs. This has to cover the rural areas, semi urban as also urban areas. There has to be a big boost to the MSMEs. There is a dual challenge of developing skills and utilizing them in a proper way. As per the Survey, the present skilled workforce in India is only 2 per cent which is much lower when compared to the developing nations. As per the Labour Bureau report, the num,ber of persons aged 15 years who have received or be receiving skills is merely 6.8 per cent.

According to the National Skill Development Corporation, there is a need of 120 million skilled people in the non farm sector .Dearth of formal vocational education inadequate skill training are the reasons. Modi Government has been talking loud of the skill development programme and also Make In India initiatives , but the work has to go at a fast pace at the base level and all measures have to be taken to plug the loopholes which are ailing our skill development policy.

Mr. Jaitley is dealing with a new India with aspiring youth. They are impatient for change. They voted for Modi in 2014 Lok Sabha elections. They are looking for assurances from this budget of 2015-16. Modi Government has to take advantage of the favourable economic climate to push the interests of the underprivileged including the youth looking for jobs. Aam Aadmi are looking for new hopes in the 2015-16 budget after Arvind Kejriwal government implemente4d his assurances for the poor in Delhi. Will Jaitley’s budget give that hopes to the common people? (IPA Service)