With the Union Budget being presented today, all eyes lay on Finance Minister Nirmala Sitharaman as India goes through one of its worst economic slowdowns. This being said, all hope is not lost yet, there are a slew of interventions the government can make to revive the economy. Let’s take a look at some of the major stakeholders in this process: the agriculture, health, & real-estate sectors.
Agricultural Sector – Strengthening Our Roots
The Agricultural sector is the backbone of the Indian economy. Today, over 50 per cent of the Indian population is dependent on the rural economy. Although its contribution towards the country’s GDP has been decreasing over the years, the sheer scale of the population that is dependent on it requires any government to ensure its well-being.
The Agricultural sector is currently going through a rough phase. In fact, other than Lal Bahadur Shastri, successive Indian governments have not done enough to revive this crucial sector, as a result of which farmers today earn dismal amounts. Unlike other Asian economies such as China or Korea, India is not an export-driven market, it is a consumption-driven market. Therefore, it is vital that the government focuses on increasing the purchasing power of our farmers.
As income levels continue to dip, hopes remain high that Finance Minister Nirmala Sitharaman will address agrarian woes in the upcoming budget. There is a popular call for the budget to take up a slew of measures to boost the sector and influence the amount of money in the hands of the stakeholders in the sector, particularly our farmers.
Industry experts insist that the budget must address the long standing issues of GST pertaining to the agricultural sector. The GST amounts on all inputs and machinery for the sector must be in the lowest bracket of 5 percent. Sectors such as animal husbandry, poultry and dairy supplement the income of farmers. Therefore, another way in which the government can focus on doubling farmers income is by paying special attention to these sectors.
Dr. Soumay Kanti Ghosh, Group Chief Economic Advisor at SBI says that “For Agriculture, the Government must take advantage of 92% of digitization of land records and ensure that the PM KISAN scheme reaches all the 14.6 crore farmer”. Despite high expectations, it seems unlikely that the fertiliser industry will see major action. However, it is believed that the budget may increase support for farm credit, irrigation and infrastructure development schemes along with the income support scheme (PM-KISAN). Another area that could potentially get attention this budget would be the revamping of crop insurance schemes in order to improve the income of farmers.
Industry experts also predict that the government may combine the Agricultural Product Market Committee (APMC), with the e-National Agricultural Market (e-NAM). Budget 2020 may also come out with steps regarding the implementation of the next phase of Direct Benefit Transfer (DBT).
Rejuvenating the Healthcare Sector
As we head into a new decade, every sector expects some form of transformation. The budget should focus on increasing public spending on healthcare, especially considering India’s current demographic, growing population and disease burden. India falls among the lowest categories globally in terms of public expenditure on healthcare. It has remained at a dismal 1 percent over the years, however, it is expected that spending will increase to 2.5 percent of the GDP by the year 2025.
Industry experts emphasise the need for increased funding in the sector. This is the only way for healthcare to be made accessible to the marginalised sections of society. The prevalence of non-communicable diseases is now on the rise. Additionally, the ratio of the number of hospital beds and other medical equipment remains extremely low. One of the suggestions to bridge this gap is a shift in focus towards home health care. Experts believe that one of the main focuses of the Budget 2020 should be on home health care. Currently, the existing taxation policies and regulations do not cover for home health care, because of which spending on the same remains a large part of out of pocket expenses.
Another popular request from the healthcare sector is a call for GST exemptions for critical healthcare equipment such as ventilators, wheelchairs, crutches etc. There must also be active steps taken to increase the number of healthcare professionals. Currently, India falls below the WHO recommended doctor patient ratio of 1:1000 at 1:1445. Thus, the government should ease regulations for medical teaching and training institutions in order to produce more medical professionals that can fill this gap thereby improving the overall quality of healthcare.
Rapid advancements in technology have certainly lead to transformations in the healthcare sector. In order to increase accessibility and affordability of healthcare, the government should give a boost to digital healthcare. The National Digital Health Blueprint ( NDHB), was a step in the right direction, but efforts must be made to continue to increase investments for the development of infrastructure of facilities such as electronic heath records.
After undergoing a series of reforms over the last couple of years, hopes in the real estate sector remain high for a series of policies that will boost the newly rejuvenated market. The real estate sector is a significant contributor towards the country’s GDP, it remains hopeful that the new budget will come with positive measures to boost growth in the sector. Industry experts hope that the government will immediately kick start the decade with the completion of stuck projects and also take measures to actively boost demand and improve buyer sentiment.
One of the popular suggestions to generate demand and growth in the real estate industry would be a 10 percent income tax exemption on new investments for properties that are under construction until occupation certificates are obtained. In order to boost consumer sentiment, the government should also consider higher levels of interest exemption limits for the financial year 2020-21. The Pradhan Mantri Aawas Yojna aims to provide 20 million homes by the end of 2022.
All curiosity is due to be put to rest later this evening — everyone remains hopeful till then.
Picture Credits: businesstoday.in