The Union Budget 2022 would come in a few weeks, in the midst of handholding the economy with multiple fiscal stimulus programmes, continued proactive vaccination drive that has covered over 150 crore jabs, global financial pressures of continued Covid-19 variants for over two years now, and the political tenacity to balance lives and livelihood.

In this entire journey, capital markets have cheered on past many months and IPO market seems hungry for more, at least for now. On the other hand, the worries that we have also seen a larger divide or chasm between haves and have-nots. Growth across and within industries seem to be a much scattered one. Large have become larger and not everyone has seen growth. Issues of jobs-at-stake linger on, how much ever we find the topic unpalatable, it’s simply a task that demands attention. This adds pressure to the polity and policy leaders to use any official initiatives to add inclusiveness to every effort.

In addition, with rising debt levels of various states, pressures on their local revenue generation has been increasing. A way-out will have to be long-term income generation as well as employment generation. There could be many shortcuts or quick-fixes to these, taxing the usual sin goods like alcohol, etc. It is not going to deliver any productive solution across the demographics each of our states are tasked to stand for.

With the targeted disinvestment plans for the current fiscal being slow as of now — not for intent — the fiscal space to construct larger-than-possible economic wiggle room is constrained. In order to balance short-term fiscal outlook as well as long-term framework, here are some imperative sectoral reforms.

Agriculture - value addition

With increasing food inflation and overall inflation, our self sufficiency has to improve, and at increased agricultural productivity. It is now left to leveraging technology to make agriculture an efficient sector. One which can feed our population, even export its surplus for value-added pricing, and more importantly at a much cheaper per-unit-economics.

Business ecosystem improvement

This has been an evergreen topic of sorts. Much efforts have gone into improving ease of doing business in India. But cutting down red-tape and doing away with a lot of perceived power play (right from municipal-level governance, all the way to the Union governance) in form of licensing, paperwork (even if it’s in digital format) is still a work in progress. Unless this reform is taken up with speed and actual intent by the policy makers, not much would move. We need to push this faster, if we really want to be a global economic power.

Capital expenditure

The RBI in an earlier research report had mentioned that every rupee on capex spent by the Centre has a multiplier effect of 3.25 on output, while every rupee spent on capex by the states has 2.0 multiplier effect.

In the aftermath of the pandemic, the Centre has been constantly nudging state governments to spend more on capital expenditure, to bring in private investments, increase local employment opportunities.

Centre has been incentivising states to spend more on capex through various methods, including enhanced ceiling for borrowings, interest free loans, and front-loading the share of devolution to the states. Of course, the GoI has been slow in this fiscal with respect to its own capex plans and hopefully will catch up the final quarter of this fiscal.

Debt markets

This is often discussed, without much impact, that our debt markets are shallow, despite the fact that GoI and its enterprises are the largest borrowers in the markets! Unless domestic debt markets deepen, and unless our companies bring in sufficient good governance norms in their entities, they won’t be able to access the international debt markets.

Environment friendly mass-transportation

Shared mobility is consequently one of the most environmentally friendly transit alternatives. The transport sector largely relies on internal combustion (IC) engines and depends on fossil fuels as a source of energy to propel the vehicles. These vehicles add on environmental and human health issues due to the emitted toxic gases. We need to work together in making the newer developments in mass transportation projects as well as existing platforms to go with renewable energy sources. This would also help us in economic savings, both in short-term and long-term, in terms of fuel pricing as well as public health.

Net zero goals

The net zero target will necessitate each ministry and state government to define the annual carbon budgets needed to reach net zero goal. Also capacity building exercise to monitor delivery and compliance would be needed.

Policy ideation around development of green financing opportunities as well as lending norms has to be worked out soon. While lending towards greener sectors or solutions would be appreciated, until the nation gets certain economic strength as well as our industries are retrofitted with green options, we cannot avoid lending to conventional fossil-based sectors for many more years.


We have over 6 crore MSMEs that employ over 11 crore Indians. Currently, access to credit is still low for Indian MSMEs. This has to move up manifold if we want to encourage robust self-sufficient entrepreneurship in our society. The reluctance to lend to MSMEs has to move beyond the current tick-mark approach that follows any governmental announcement or push to the banking system.

Skilling & upskilling

Our industries are constantly juggling the present and the future, in terms of their resources allocation and planning, especially in terms of human resources. In this aspect, with emergence of technological innovation, especially the 4th IR tools, industries are yet to invest as much as their potential and might allows them to in re-skilling and up-skilling.

GoI can incentivise the industry by allowing enhanced training expenses to be offset against taxable income. This could push for value addition to the overall productivity and per-capita unit earning per skill in India.

Education, nutrition during pandemic

Covid-19 created access-to-education divide with its virtual schooling mode. Millions of children could not access education lessons due to this. In many parts of the country, school also means access to meals for children.

The policy makers have to take into account that this continued disruption in childrens’ growing years impairs their learning and also creates overall health and well-being issues for them. For a better society in the future, we need to take care of our future citizens - our children !

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