AatmaNirbhar Bharat is a far-reaching programme not only for making India self-reliant but also to put it on a higher growth trajectory. This growth we describe as AatmaNirbhar Growth has to be spatially dispersed, job generative and equitable. This then would ensure a ‘V’ shaped recovery post-COVID and not a ‘K’ shaped one that has a few stakeholders concerned. India Economic Forum would return actionable recommendations.

AatmaNirbhar Bharat is a far-reaching programme as envisioned by the Hon’ble Prime Minister and we believe that it would logically lead to AatmaNirbhar Growth.

India Economic Forum, this year focuses on this and through consultations with all relevant stakeholders provide a road map and recommendations that would chart this path. The key challenges would be increasing consumption, handling debt situation, getting more private investment as merely government spending may not suffice to generate employment, focus on finding resources to fund infrastructure development and finally doing all this while not losing sight of Environment, Sustainability and Governance.

Being organised soon 20 days after the Union Budget, the idea is to crystallise ways in which the budget can be translated into AatmaNirbhar Growth.

Last year too, the Forum had returned several recommendations. These were published as special issue of INCLUSION magazine and are also available online at: https://inclusion.in/category/inclusion/road-to-recovery/

Power Panel: New Education Policy & the Economy

The New Education Policy is perhaps the most well written and impactful policy document in recent times. From school education to higher education, on the supply side, infrastructure provisioning, teacher training, benchmarking with international standards, and building world-class research institutions that are able to compete in global rankings are vital to transforming the Indian education system.

On the demand side, at the school level, improving learning outcomes, ensuring foundational literacy, access to learning materials are key and, at the collegiate level, enhancing the higher order skilling, training and employability of the nation’s youth to focus on creating a future-ready workforce are the requisites.

For India to become a $10 trillion economy, education will play a key role in creating a tectonic shift that will empower its youth into becoming a valuable, skilled and highly productive workforce.

Key issues:

1. How can the NEP be leveraged to realise India’s demographic potential and unleash its economic potential?
2. How can we leverage technology to achieve the vision set out by the NEP?
3. How do we build world class globally competitive research Universities in India?

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Power Panel: Environment, Social & Governance

The shift of the investment priorities of future generations is evident from what we are passing through today. With increasing investments into areas and businesses that can help societies become more equitable, inclusive and sustainable through business practices and internal systems, businesses are increasingly being held to higher standards of social responsibility.

The COVID-19 has necessitated that a platform be created for handling future pandemics. Although it is once in a century eventuality, but humankind cannot be surprised once again. Equally important is to universalise health as well as energy which will go a long way in eradicating poverty.

On the environmental front, this could mean helping meet climate change goals, responsible use of natural resources to minimize pollution & waste generation and effective management. On the social front, this pertains to a business’s internal behaviours towards its shareholders and stakeholders from consumers, to human capital and supply chains. For corporate governance, this could entail strong business ethics, refraining from anti-competitive practices, tax transparency and boardroom diversity, transparent ownership and control, fair executive pay and sound accounting practices.

Key issues:

1. How do we drive social impact and economic growth through technology focused ESG investments?
2. How do we democratize access to funds available for impact investments?
3. How do we create a positive environment for bolstering such investments for India’s economic future?

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Power Panel: Consumption and Debt

Consumption has been the prime driver of India’s growth story over the last three decades. Pandemic and the lockdowns have dried out consumption demand in the economy. In order to revitalise the consumption-led growth it is imperative to increase the consumer’s purchasing power by putting more money in his pocket. The marginal propensity to consume of the middle income and lower income groups are way higher than the higher income groups. Therefore, any incremental money in the hands of lower income and middle income groups would have higher chances of going into the consumption chain. This could be done by lowering taxes. But the personal income tax has remained untouched in this budget. Debt also plays an important role in boosting demands and consumption. Many borrowers benefited from the loan moratorium. But it was a short-term relief. Income of a large number of borrowers still remains disrupted. Will it lead to surge in defaults?

Key issues:

1. Personal Income Tax and consumption
2. Direct transfer of tax rebates
3. Life of borrowers post moratorium
4. NPAs and Defaults of Financial Firms

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Power Panel: Investment and Infrastructure

The Union Budget 2021-22 lays strong emphasis on capital expenditure and infrastructure creation. Capital expenditure is proposed to be increased by 34.5 per cent to Rs. 5.54 lakh crore in the financial year 2021-22 from Rs 4.12 lakh crore in 2020-21. Apart from this, Rs 2 lakh crore will be provided to states and autonomous bodies for their capital expenditure during the year beginning 1 April 2021. The Finance Minister has proposed this massive increase in capital expenditure despite the resource crunch as the government’s revenues have been badly hit due to slump in the economy. Further, there is a proposal to create an infrastructure-focused special financial institution called Development Finance Institution with a capital base of Rs 20,000 crore. It will be used for funding infrastructure projects which require long-term patient capital. The Finance Minister seems to have relied on the Keynesian theory of capital creation to spur growth and jobs. The higher investments in infrastructure should have a multiplier effect on the economy. Will the private investors pitch in taking cue from the increased public spending? Will it help revitalise the economy? In view of this the Power Panel will examine the following:

1. Multiplier effect of capital expenditure
2. Development Finance Institution
3. Large infrastructure projects and inclusive growth

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Power Panel: Employment and Private Investment

Covid-19 pandemic-led lockdowns caused disruptions in businesses and resulted in huge job losses. The union budget 2021-22 seeks to give a push for big, long-gestation infrastructure projects. There is no doubt, such a push is good for the economy. But, what kind of impact will it have on employment generation? Large infrastructure projects are very capital-intensive. Moreover, they have a long gestation period. MSMEs employ nearly 40 per cent of the country’s informal workers. They are badly hit. A large number of them have been forced to shut shops. It is largely dependent on private investments. Will the government’s push to capital expenditure help revive private investments and create the required jobs?

Key issues:

1. Scope of jobs post pandemic
2. Revival of MSMEs
3. Impact of Govt expenditure on private investments

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AatmaNirbhar Growth: A View from the Centre

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AatmaNirbhar Growth: A Macroeconomic View