As India awaits Budget 2021 to be presented on February 1 , PHDCCI outlined a shadow budget 2021-2022 at a virtual physical event on January 18 organised with the aim of discussing the upcoming budget and put forth suggestions and recommendations. Some of the eminent panelists on the broadcast were Sanjay Aggarwal, President, PHDCCI, Pradeep Multani, Sr. Vice President, PHDCCI, Dr. Arvind Virmani, Economist & Chairman, EGROW, Dr. Charan Singh, Economist & Chief Executive, EGROW, Anil Chopra, Chairman, Economic Affairs Committee, PHDCCI, Sandeep Aggarwal, Industry Affairs Committee, PHDCCI, Dr. A Vishandass, Director, EGROW & Former Chairman, CACP, Dr. Rattan Chand, Director, EGROW & Former Chief Director, Monitoring & Evaluation, MOHFW and Col. M P Singh, P.H.D., Defence Analyst.
Mr. Sanjay Aggarwal, President, PHDCCI, in his inaugural speech, said, “Major recommendation of ours is, the soft infrastructure. We need to spend a huge amount of money on health infrastructure in many ways. First, the shortage of doctors, nurses and paramedics. We need to increase the number of medical, nursing and paramedical seats for education and we must double our medical professionals in the next three years. We need to spend a huge amount on medical manpower and on all levels of medical infrastructure. All hospitals need to be fully equipped and we should have a full proof mechanism for delivery of funds for running expenses, salaries etc. without compromise and it should be done on a national level. The other thing is education. Our suggestion is to make sure we come up with skilled manpower, the stress should increase on skills. Another requirement that we think is very important is the need for contract enforcement and law & order. One major hesitation that foreign investors have when coming to India is, the contract enforcement period and the law & order situation. We have crores of cases in our courts yet, 37% of High Court posts and almost 22% posts in District Courts are vacant. We ought to have a full proof system where we need to double the number of judges and police.”
Pradeep Multani, Sr. Vice President, PHDCCI, joined the conversation virtually and spoke about the impact of Covid-19 on the health and economy of the country and how the government has been trying their best to revive the industry, trade and economy as a whole. “India has had significant improvement in the ease of doing business rankings and has surpassed its 142nd rank to 63rd among all the countries. He spoke about how we need to reduce the cost of capital as it will help to maintain and re-donate domestic demand and enhance competition of producers in the domestic market as well as exporters in the international market. Mr. Multani also spoke about the pharmaceutical space in India and Ayurveda, which needs to be promoted and there should be a level playing field between countries like China,” he said.
Dr. Arvind Virmani, Economist & Chairman, EGROW, spoke about different issues and suggestions for the budget. He said, “First, declining trend in GDP growth and suggestion is policy reforms for accelerating inclusive growth. Second issue is, rise in unemployment due to contagion fears and particularly in mass contact services and can be dealt directly with targeted government expenditure and incentives. Third weakness is poverty alleviation and public health issue caused by the pandemic which can be changed by integration and reform of the welfare system. Government systems need to refocus on public health, education and R&D.”
He added, “We need a dualistic trade policy with three goals. One, reduce dependence on monopolised exports. This is critical for economic, social and national security because China has used deliberate policies to monopolise many exports. The critical thing is to build minimum efficient scale because the scale of our production in many categories is too small to compete with China. Second, promote employment generating exports as India is missing from the global supply chains. Third, diversify agriculture and allied sectors and the policy must compliment the diversive reforms. Parts of labor force withdrew due to contagion fears. The infrastructure and public goods projects need to be accelerated which are ‘construction intensive’. Also, incentivise the installation of virus cleaning filtration systems in indoor contact service areas.” He has also projected that India will witness a growth rate of 10% in FY21-22 and that after the effective implementation of reform agenda of the Government, the country will record around 7.5% of growth over next decade.”
Dr. Charan Singh, Economist and Chief Executive, EGROW, joined in the conversation and said, “In the days to come, non-banking finance companies will play a very prominent role. The NBFC’s are a weak link here and I think the government should do something about that. The government should step in and strengthen the non-banking finance companies. Budget is the Government’s statement of things to come in the next years. They should provide national level institutions for quality research and train people for NBFC sector. The government should not worry about the fiscal deficit but the time has come to monetize the deficit. India should have a fiscal policy committee and a fiscal institution and that institution can take care of various issues which keep coming up. so that the RBI can focus on the industry. The government should allow the pensioned to use LTC benefit in order to revive the demand and a way to kick start the economy. Lastly, after Covid-19 we need to start thinking about and address mental health issues. Problems like unemployment, anxiety, depression, poverty and suicide need to be focused on. We have everything that we need to attract foreign investment like China does. We need to ensure our high commissions and foreign embassies need to play a bigger role about attracting investment. Trade associations should spread the word about India being a great destination for industry”.
Sandeep Aggarwal, Chairman, Industry Affairs Committee, PHDCCI, on the other hand, shared what the industry wants from the budget. He said, “I will be talking about industry and telecom. The Indian manufacturing industry has declined over a period of time. We should make 25% of our GDP with manufacturing and on the telecom side, 20% of the GDP should come from IT services. We need to push for ‘Make in India’ and we should be ‘vocal for local’ because in the future we may not be on good terms with other countries. The Productivity Linked incentive scheme taken out by the government is of 1.46 L crores and we want that this scheme is properly tuned for MSME sector and the Indian companies. We have to invest in Research & Development, the money for it comes from the government. We need a chip manufacturing plant because we have the technology but lack the infrastructure, the government will then save a lot on foreign exchange. The government took out the NIP, but Covid struck but I hope they intensify their investment because then the country will reap the benefits”. He also added that promotion of the manufacturing sector and creation of a conducive manufacturing ecosystem will not only enable better connectivity with global supply chains but also establish backward linkages with the MSMEs sector in the country leading to overall growth in the economy and creation of huge employment opportunities.”
Dr. A Vishandass, Director, EGROW & Former Chairman, CACP, speaking about agricultural needs, said,“Agriculture currently contributes 40.6% to the GDP, we have turned the country to net food exporting country. We need to generate demand. These 7 steps will benefit the country. One, we need to have a stable agriculture trade policy. No country can have a commanding economy unless it exports. Second, there needs to be a spread of global demand and export from India in terms of organic products etc. and, Indian embassies should indorse the Agro industry on an international level. Third, optimise land and utilise it better by using a solar tree and endorsing clean and green energy. Fourth, farmers are unable to sell at MSP, about 30% farmers are out of that system.”
Dr. Ratan Chand, Director, EGROW, Former Chief Dir, Monitoring & Evaluation, MoHFW, gave his recommendations and weighed in giving due attention to the healthcare sector. He said “Health is important and adopting a healthy lifestyle. Healthcare services need to focus more on prevention of diseases and apply preventive and promotion technique. Health education should be started in schools. The Indian system has neglected healthy living and prevention and efforts should be made to include allopathy and yoga. This should be integrated in the education system at slightly higher levels of science and medical students. There is a shortage of healthcare services personnel and have government officials to manage the healthcare system. Investment should be provided to Research & Development, medical education, infrastructure, manpower and logistics requirements. Hospitalisation expenditure should be covered and hospital rates should be regulated. Reduce ODP expenditures and doctors, staff and medicines should be made available. Government should establish trust in healthcare system”.
Col. M P Singh, Defence Analyst, gave his suggestions and expectations from the budget. He said, “We need to have a commensurate defence budget. Having well equipped, modern defence forces give us security as well as strategic advantage. Considering the geopolitical situation and our large boundaries, it’s important to modernise forces to face our adversaries. I am expecting an increase of 11-12% in the defence allocation. The capital expenditure should be increased. This budget should boost ‘Make in India’ so that we can be independent. Incorporate private sectors in R&D and develop arms and equipment. Guarding the terrain means an increase in manpower, that should be thought of. Ex-service men retire at a young age and can be utilised in various sectors”. He concluded by saying that Make in India will decrease our dependence on other countries and cut the cost of the product.”
Take a look at PHDCCI Shadow Budget 2021-22 here: