For India’s budget, Titrop walk between jobs and Gov Bollywood deficit. Poverty and development

Mumbai, India – Prema Anngaonkar wakes up a few hours before dawn and starts cooking in his suburban Mumbai house to sell. His son, immortal returns from work only when the sun is well up and he makes it about 100 vegetable-filled paratha.

Salgaonkar lost his job in a non -profit organization about a year ago and his son Amar lost his job to sell mobile phones and data plans six months ago. With no retail vendors, they eventually performed temporary work, traveled overnight on transport trucks, helping drivers to interact with police and other officials.

This week, Finance Minister Nirmala Sitarman presented the budget on 1 March, keeping in mind the goals of fiscal deficit, will have to find a way of development and employment for millions of people such as anniversary, who are struggling to find stable work.

“We don’t sit at home,” Prema says, how they ended in these temporary jobs. She quickly lists how prices are shot for vegetables, causing him to get very little money to meet expenses and save Amar’s wedding, which now seems like a distant dream that his There is no stable job nearby.

India’s gross domestic product (GDP) growth fell to 5.4 percent for the end of September 2024, the latest data available and the slowest among the seven quarters. Development for the financial year ending March 31 is expected to slow down by 6.4 percent, which is the slowest in four years. However, “there is no place for fiscal generosity,” or growing for kick-start growth to increase government expenses, says Dheeraj Nim, an economist of ANZ Bank.

The increase in government spending during the epidemic increased India’s fiscal deficit to 9.3 percent in the financial year ending March 2021. Sitaramanan has said that it is planning to bring it down to 4.9 percent this year and below 4.5 percent next year.

Economists say that weakened consumer demand by private companies and low capital investment economy is pulling a one.

“Some economists, including me, stated that Kovid’s demand was a problem,” Saying Economics Professor Sunil Sinha at the Institute for Development and Communications, Chandigarh.

Sinha says that the demand for goods and services is called in some areas only in some areas, such as the rich Indians, for international tourism, luxury cars and other premium products, Sinha says. But the demand for massive consumption products, such as soap, shampoos and biscuits, was low and fell forward in the previous quarter.

Amar, who worked in India’s fast growing mobile sales sector for nine years, found that after the epidemic, it became difficult after selling mobile phones and data plans, friends and colleagues were fired from their jobs and finding a new job It became difficult.

‘Border’ for government expenditure

It has been in power in the last decade, the Prime Minister Narendra Modi-Left government has spent money on construction of highways, bridges and other large infrastructure projects to generate development and employment. But it may not be possible to give the target of fiscal expenses.

Nikhil Gupta, the chief economist of Mumbai -based securities firm Motilal Oswal Securities, says, “How much can the government grow.” “We are giving a lot of burden to the government by expecting to promote development.”

India’s private sector investment in building capacity has increased from 30 percent to 22 percent for businesses despite reducing tax rates in 2019.

Sinha says that corporate expenses will come with only demand visibility, which remains weak.

This criterion of encouraging demand without overspeeding has also become difficult with the new administration in the United States.

“The government (fiscal deficit) will stick to the goal, as it would like to indicate the belief that its expenses have control, especially when the capital flow has become unstable due to policy changes around the world,” the economist of the professional, says Rumki Majumdar Service firm Deloite India.

Trump’s threat

Foreign investors sold shares of over $ 8BN in Indian stock markets in January this January, when President Donald Trump took over, as the dollar strengthened and Trump promised to support American businesses on offshoreing in other countries. India’s foreign exchange reserves also fell during this period.

The Trump administration has threatened tariffs against imports and questioned the requirement of H -1B visas for highly skilled professionals, which can affect India’s technology sector.

“There is a very vibrant, visible debate in the Trump camp on skilled worker visa. Therefore, it is very early to predict how it will play, ”Rick Roso, the Chairman in India and Emerging Asia Economy in the Center for Strategic and International Studies (CSIS), Washington, DC-based think tank.

Trump’s tariff on Chinese products can create manufacture in India, trying to encourage India Washington, DC and Beijing in the last few years of the trade war. However, New Delhi has got mixed success.

“To reduce more dependence on Chinese manufacturing, America’s push has helped India in some technology manufacturing investment in areas such as semiconductors and solar manufacturing. But it is expected that under Trump, India cannot expect the US government to continue to encourage American companies in India to ‘Friends’ in these areas. India will need to win investment based on domestic market conditions, ”Roso said for (federal) and state levels require aggressive reforms.

Sinha says that many such bottlenecks for investors including land acquisition, water and power supply are now in the hands of the state governments, many of which have set up high unemployment and weak consumer demand by offering election SOPs, such as cash -up . This has adversely affected the state’s lack of finance.

For example, Salgaonkar says that it has benefited from a Maharashtra government’s plan, giving women a cashout of Rs 1,500 ($ 17) a month. This has helped him balance an uncertain domestic budget.

But Motilal Oswal’s Gupta says, “We have to ask, are these plans necessary?” What is the basis designed to these schemes? Are they just a political equipment? Structurally, we do not like it and there is a limit to how much they can increase development. ,

A plan requires

If state governments spend on capital expenditure, such as small scale road construction, then it can generate more employment than the Union Government’s larger infrastructure projects that are rapidly mechanized, Sinha says.

The government also needs to improve labor, land, capital to promote production, which will help in creating jobs.

India’s growing construction sector, which is also its second largest employer after agriculture, can also be promoted in the budget, says Motilal Oswal’s Gupta.

Although there has been some debate on whether relief can be given at income tax rates, economists do not fully agree that this can increase the demand for lower middle class of India.

Although the sluggish demand has been a growing problem in the economy, Sithraman has said that the recession is “not systemic”. He said that the recession of the last quarter was due to slow in public investment in an election year, during which the governments are prevented from spending by the Election Commission of India to influence election results. Sitarman is expected to grow in the next quarter.

Salgaonkar has its own recipe for Sitarman: increase the purchase capacity by manufacturing low prices, jobs, or both.

Inflation increased in October, reached a height of 14 months and crossed the target of 4 percent of the Central Bank and Talking about the rising wheat prices, gas and clothes, cooking and clothes between other essential commodities While income in his house is reduced.

While investing in physical infrastructure is likely to continue despite fiscal obstacles, ANZ’s Gupta says, “I think installing a vision and roadmap to improve India’s human capital (by improving skills and education) There will be a welcome step “. This can be the only long -term way to promote growth in the most populous country and the fifth largest economy in the world.