It is a marked and refreshing change — a Union finance minister who is upfront and frank enough to say that his maiden budget is pro-business. Arun Jaitley’s remarks that a pro-business government can also be pro-poor put things in the right perspective. Under the UPA, business had come to acquire negative connotations. Mr Jaitley has minced no words — industrial growth is the engine which will pull the economy ahead and generate jobs and revenue. If social sector largesse was the sole answer to India’s problems, then the UPA rule should have been a golden period. No doubt schemes like MGNREGA were well-intentioned but the government of the day did not appreciate enough that the aspirational Indian today does not want charity. The NDA’s task will now be to undo some of the unproductive schemes and move towards skilling up jobs and providing quality education, among other things.
According to government data, even during the rosiest years of growth, 2004-05 to 2009-10, when growth averaged 8.43%, the economy generated no more than two million jobs for the 55 million people entering the workforce. This is a paradox as virtually every sector lacks skilled workers. There will no doubt be the usual Cassandras who will accuse the government of neglecting the poor. But the fact that the NDA has proclaimed its pro-business intentions will give industry more confidence. The next task will be to cut through the notorious red tape that scares businesses off. It is no one’s contention that rules and regulations are given short shrift, but businesses cannot get stuck in bottlenecks. Unless the government goes in for greater privatisation and opens up the economy to foreign investors in more sectors, it will not be able to get out of this gridlock. Handing out food and money simply created a non-productive dependence economy. What India needs is a targeted boost in infrastructure, agricultural reforms and a dynamic health and education system.
The statements made by Mr Jaitley are designed to kickstart the economy. He also has a pro-business prime minister to back him and this will make all the difference. In the UPA, the problem seemed to be a difference in approach to business between the party and the government. Now, India should be on the trajectory to economic recovery by the time the next budget is presented. The first change that must be made is to alter our antediluvian labour laws. A sustainable job and improved quality of life are the best forms of inclusion. Mr Jaitley’s remarks may well mark the beginning of a transformational change in the mainstream development paradigm in India.