Budget for Growth

Beyond the 2023-24 Union Budget, India must seize the opportunity that it did not in the 1950s. In education, for example, the task is to build a hybrid model that combines primary schools with institutes of "eminence". The digital era gives India the opportunity to make up for two generations of lost economic opportunity

HISTORICALLY, EVERY COUNTRY that has risen from poverty to prosperity has reduced inequality and created jobs by focusing single-mindedly on economic growth. For Finance Minister Nirmala Sitharaman growth is the centripetal point around which all else in the economy revolves.

Clearly, 2023-24 is a politically loaded election cycle. Nine state assembly elections are due in 2023. The five key states are Karnataka, Rajasthan, Madhya Pradesh, Chhattisgarh and Telangana. With the Lok Sabha election due in April-May 2024, the Narendra Modi government will be tempted to focus on populist measures.

The Opposition has already got off the blocks. Several states ruled by the Congress and its allies, including Rajasthan, Chhattisgarh, Jharkhand and Himachal Pradesh, have pledged to implement the controversial old pension scheme (OPS) despite economists warning that it will lead to financial ruin.

Montek Singh Ahluwalia, a co-architect of the 1991 liberalisation policy and a confidant of Dr Manmohan Singh, called the OPS an "absurd idea" and "a recipe for financial bankruptcy." But emboldened by Congress leader Rahul Gandhi's endorsement of the OPS, state leaders like Rajasthan Chief Minister Ashok Gehlot have dismissed the criticism.

While the Modi government will eschew financially disruptive populist schemes like OPS, it will double down on welfare benefits in a critical election cycle. The government's priorities post-Budget must be to rapidly deploy resources towards the PM Gati Shakti Master Plan. It has the same transformative potential on infrastructure as digitalisation has had on e-commerce, e-payments, direct benefit transfer (DBT) of subsidies, online banking, health insurance, edtech and fintech.