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FM Nirmala Sitharaman. (PTI)
FM Nirmala Sitharaman. (PTI)

Budget 2021: Getting India back on the growth track

  • The backdrop to this year’s budget makes it imperative that the government comes up with a sound plan to revive the economy

The past year has tested India on many fronts. Even as a pandemic-induced lockdown ravaged the economy, a cash-strapped government struggled to offer relief, especially to the urban poor. Many lost their jobs and had to leave the cities they had begun to call home. At the same time, the threat of war with a nuclear-armed wealthier neighbour loomed on the horizon. Tensions with China have thawed, but the conflict may not be over yet.

The backdrop to this year’s budget makes it imperative that the government comes up with a sound plan to revive the economy. The primary imperative is growth. A weak economy invites external aggression and breeds internal conflicts. As China’s example shows, a nation’s clout springs as much from its wealth as from its military might. Growing wealth on a sustained basis is also critical if we want the animal spirits of Indian industry to revive, so that industrialists feel confident enough to make green-field investments, and are able to create jobs at scale. Unless that happens, the economic aspirations of our youth can easily turn into political frustrations.

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What would constitute a sound policy approach for India today? The global consensus on what constitutes sound macroeconomic policy has undergone a sea change since the financial crash of 2008. The post-crisis churn, accentuated by the pandemic, has challenged fundamental assumptions about what the rules for fiscal and monetary policymaking should be. Some economists argue that the era of a rules-based approach is over. But can an inflation-prone democracy such as India ignore a rule-based approach altogether?

Three of India’s brightest economic thinkers—Montek Singh Ahluwalia, Shankar Acharya, and Sajjid Chinoy—will engage in a live panel discussion today evening at 7pm to debate these questions.

The discussion will be moderated by journalist Mitali Mukherjee (see box for details).

The all-star panel is part of Mint’s special pre-budget ‘Road to Recovery’ series.

Curated by Mint’s editors and backed by reports, commentaries, infographics, and podcasts, the Road to Recovery series will run till February.

The series aims to provide actionable insights on the economy and bring clarity on the policy changes required to get Asia’s third-largest economy back on track.

Over the past two weeks, our live panel discussions have examined issues such as the challenge of funding and distributing the covid-19 vaccine, countering the China threat, and the unequal impact of the pandemic on jobs and economic opportunities.

Tonight’s panel, Reviving India’s covid-hit economy will examine how the upcoming budget can revive growth without compromising macroeconomic stability.

Two of our panelists, Ahluwalia and Acharya, have spent decades in shaping economic policies for the country and were part of the original reforms team that designed the big-bang liberalization package in 1991.

Chinoy, one of the most trusted voices on the Indian economy today, is the India economist at J.P. Morgan and a member of the Economic Advisory Council to the Prime Minister (EAC-PM).

Do join us today evening as these stalwarts discuss the state of the economy, and the policies needed for a sustainable recovery.

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