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United colours of India

Socio-economic development and global achievement must be key aims of the '06 Budget, writes Mukesh Ambani.

india Updated: Feb 06, 2006 01:44 IST

India is currently the flavour of the season globally. Its growth story is pulsating with infectious optimism. As Finance Minister P. Chidambaram gives final touches to Union Budget 2006, he faces a huge challenge: how not to dampen this enthusiasm about India's manifest destiny? This challenge becomes more daunting because the economic reform process needs to cross another socio-political hump, more arduous than what he faced in his first stint as a dynamic commerce minister who dismantled the permit-licence superstructure in a single courageous sweep.

Fortunately, the reformer finance minister of the Nineties is heading the government as prime minister. However, the composition of Parliament is qualitatively different from that of the early Nineties. Building a consensus in support of desirable policies will demand dexterity and skill of the highest order. Conceptually, the challenge this year lies in blending the urgent imperatives of accelerated growth with the pressing need for greater equity. Policies leading to higher productivity and improved competitiveness must be made compatible with the aspirations of the vast masses across the nation. An important opportunity to build on rising confidence in climbing to a higher trajectory of economic growth needs to be brought in harmony with heightened consciousness about the weightage of social development in India's growth story.

Over time, the Union budget has assumed a character that goes much beyond an exercise in financial balancing and taxation adjustments. It has come to signify a statement of socio-economic aspirations. Till recently, developed countries grew by relying on innovation and sophisticated services, while developing countries depended on raw materials and low-end manufacture. India is changing this paradigm and making a statement that people can be a potent force for development. The budget should reflect this strategic change in developmental philosophy.

Therefore, generating employment must be at the centre of the rainbow of economic policies and fiscal initiatives in Budget 2006. India is a country of young people and is generating employment of only one million a year, as against the asking rate of ten million. This situation is unacceptable. By outlining strategies for mounting a comprehensive assault on the problem of unemployment, the budget should win over the support of India's youth behind the endeavours of rapid growth.

The National Rural Employment Guarantee initiative underlines the high priority the government is giving to this task. But, over time, employment generation must become an integral component of the growth story and encompass India's educated youth and professional workforce.

This demands that an elevated rate of economic growth is brought about with accelerated development of almost every sector of the Indian economy. It is critical to ensure that India has several of its engines of development firing on all cylinders to sustain growth, progress and prosperity over the long term. Dispersed development is vital to make sure that progress permeates to the countryside and is not the privilege of a small proportion of well-to-do Indians residing in urban agglomerates. Innovation is important in the context of a knowledge-driven era. International competitiveness is essential for survival in a globalised world. And going global is necessary to access and create opportunities beyond India.

Fortunately, there is enormous confidence among young Indians, corporates and policy planners that India can take on the world. Indian products are finding export markets, Indian service offerings are attracting overseas users and Indian companies are making global inroads.

As a nation, we have to aim and achieve double-digit economic growth on a sustained basis. This is essential to pull India from the trappings of poverty and deprivation.

Simultaneously, we have to aim to attain global leadership in every sphere of economic activity.

Many sectors would qualify on these criteria - agriculture, irrigation, food processing, energy, transportation infrastructure, construction, automobiles, information technology, telecommunications, biotechnology, tourism, organised retailing, education and healthcare. All these sectors can undoubtedly build upon India's market potential, competencies and competitive advantage.