MUMBAI: The economic survey has called for a philosophical approach to governance by significantly rolling back regulations to accelerate economic growth and employment amidst unprecedented global challenges. Whether some of these suggestions will be included in the budget being presented on Saturday remains to be seen, as the suggestions in the economic survey are not binding on the finance minister, even though they are prepared on behalf of the minister.
The world is evolving more rapidly than anticipated, with 2024 having seen political and economic uncertainties the world over, especially in Europe, and with elections in three big democracies – India, the US and Indonesia.
“Getting out of the way and allowing businesses to focus on their core mission is a significant contribution that governments around the country can make to foster innovation and enhance competitiveness”—may be going back to the election promise of the prime minister Narendra Modi in the run-up to his first term in office when he had promised ‘minimum government and maximum governance’ but something majority feels like having completely reversed as his government grew in size disproportionately while government began to control personal lives much more.
Thus the survey prescribes a deregulation stimulus to raise the growth average in the next two decades that require reaping the demographic dividend—so that the country becomes a developed nation by the time we turn a century as a nation. The survey further argues that the government needs to embrace risk-based regulations and change the operating principle of regulations from ‘guilty until proven innocent’ to ‘innocent until proven guilty’.
The survey also delves into building a trust-based society to achieve economies of scale, just as the information technology sector and the startup ecosystem that emerged in Bengaluru in the 1990s. Calling for an encore, the survey calls says, “it is a good bet that our people will overcome the challenges and turn them into opportunities on the way to 2047.”
Noting that since the era of rapid world trade growth has is behind us, we need to make an all-out effort to attract, promote and facilitate further domestic and foreign investments to become a competitive and innovative economy on one hand and on the other private sector strategic investments in strengthening domestic supply-chain capability and resilience for the long-term.
Laying great emphasis on the role of public policy in energy security and energy affordability in enhancing and maintaining competitiveness in the backdrop of climate change, the survey wants the country to chart own path to energy transition and diversification away from fossil fuels as electric mobility makes economic sense due to abundant renewable energy and coal.
More importantly, public transport is a more efficient alternative for viable energy transition given our vast size and limited land availability. The survey also underlines that energy transition plans must be mindful of geographical vulnerabilities and avoid deepening our dependence on external sources for critical imports and thus it makes better sense to focus on adaptation rather than on emission mitigation. Noting the positive correlation between states that score high on the ‘ease of doing business’ parameters and the level of industrial activity, the survey states that aspiring states will need to raise their industrialization quotient and lauded the success story of the production–linked incentive scheme in in air-conditioners through government intervention.
The survey also anticipates challenges that we will face in the near future, such as threat of restrictive trade policies that have potential to reduce exports and widen the current account deficit.