Budget 2016: There are tremendous expectations from FM Arun Jaitley and all the ‘magic’ it is supposed to unleash. As always, we are likely to be disappointed at the lack...
Budget 2016: There are tremendous expectations from FM Arun Jaitley and all the ‘magic’ it is supposed to unleash. As always, we are likely to be disappointed at the lack of REALLY big bang announcements and reforms. Part of that is the maturing process of the nation’s economy, where it is not necessary that ALL big bang reforms are announced at the time of the budget. India arguably remains one of the few countries in the world where the passing of the annual budget is such a mega event. In most countries it is a non-event that very few of the citizens even pay attention to! Having said that, there are of course our expectations from the budget, partly because it hasn’t (yet) happened in the regular course of events. These expectations revolve around the flagship ‘Digital India’ program launched by the government (as a slogan).
Digital India, if successful, is important because it is the solution to a number of the challenges India faces:
– It is a strong mechanism for bridging the rural/urban digital divide
– It will hopefully spur rural economies, thus allowing enterprises to truly leverage ‘bottom of the pyramid’ commercial opportunities in an easier manner than they can today. And, more importantly, it will hopefully create job opportunities in the rural areas, preventing the massive uncontrolled migration to cities that is challenging most cities’ infrastructure.
– It is India’s best chance of leveraging our massive demographic advantage in the world and truly creating a demographic dividend, as opposed to a demographic disaster.
– It is also the foil which can further catalyse the recent heartening trends towards increased innovation and the start-up economy gathering speed.
So, what does the budget need to do?
– Accelerate the ‘ease of doing business’ activity that has been going on for some time now.
– Create an investment regime and climate that incents successful start-ups to remain Indian enterprises as opposed to migrating to Singapore, US, Australia et al!
– Improve the IP protection climate. No country can become a technology super-power without very strong IP protection laws AND enforcement in place. We have a long way to go here.
– Make a strong statement as regards STABLE policies where continuity of direction is ASSURED. A key step was taken with the taxation issue – this needs to be extended and the business community across the board needs to have comfort that there won’t be massive (sometimes draconian) reversal of direction of key policies.
– Continue to focus on education reform. We are still in the situation where, anecdotally, only 25-30% of our graduates are readily employable. This HAS to change and is not a sustainable path to getting a demographic dividend.
– And create an environment where the entire country does not hold its breath on every February 29th!”
(The author is VP & Gartner Fellow, Country Manager Research (India), Gartner)