Economy India

Editor’s Page

Manohar Manoj
Manohar Manoj Editor, Economy India

With back-to-back achievements of handsome sort of economic growth rate in the year 2021-22(8.9 pc) and 2022-23(approx. 7 pc)  and now a very balanced sort of budget in terms of both capital investment and political freebies, have definitely given this Modi government some moments to relish and to feel theirs rejoices. This is the first time since the demonetization move brought on 8 Nov,16,  this NDA Govt. has no guilty feeling now which rather has been converted into gut feeling on the front of its economic decision makings. As one can be fully assured that our economy has now been able to occupy its pre covid era and aura.

On the other side Modi govt. has also regained the same temperament of economic decision-making that it had during pre demonetization era which was comprised of all sorts of robust reforms. Talking about Budget 23 we all have gone through many lusty and lofty announcements of the budget presented by Finance Minister Nirmala Sitaraman; but when we go through the whole status of our economy, we find all is not well.  Fiscal deficit and violation of the FRBM Act are worrying, but the most worrying point is the level of public debt which has gone from 60 pc of GDP to 85 pc now. Second, the thing which we are feeling very happy about is the earmark of 10 lakh crore for the capital building of the country. But the irony is that this same amount is being paid on account of interest payment also by the govt. of India. Such a huge amount of internal and external loans has compelled govt. to pay such an hefty amount of interest on them which just equals our capital investment actually constitutes around one-third of our total revenue expenditure. It means we have predominantly become a debt-ridden economy.

We all know the present structure of economic development is very much the outcome of deficit financing and debt capital being adopted by the governments and corporations both, which enable more spending than income and thus expand the leverage to investment and streamlining employment, production, income, consumption, and saving cycle. However such sorts of economic tools have created much havoc also, like bankruptcy, loan frauds, rising NPAs, Stock market crashes, and fugitives activities on behalf of corporate. Unlike corporates, govts. are known for their inbuilt system of security, but ultimately it raises the liabilities over them and eventually burdened the public money collected through taxes. Therefore the time has come to follow that sort of development mechanism which is not based on debt or loan, but rather on the reinvestment of production surplus created by governments and corporations both.

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