Budget 2016 should focus on these key areas

The ‘halwa ceremony’ that marks the printing of budget documents took place on Feb 19. It signals the move towards the auspicious budget session. Media reports point that the PM is closely involved in the budget which is a great thing for the country. The government has also received suggestions from more than 7000 people who are to be seen in a positive light. The past few weeks have focused on 'Make in India' that saw pledges of more than 15.2 lakh crore, and steps for startup India and entrepreneurship, etc., which is a significant first step. There seem to be some areas where interventions from the government are likely to benefit people and institutions. This include:

1. Infrastructure: The pace of infrastructure development has picked up in the recent past, but a need is felt for greater steps towards bettering India's still improving infrastructure. It is because South Asia as region reels under an infrastructure deficit. Infrastructure development is also imperative for garnering investments for key sectors of the economy like manufacturing that have traditionally underperformed. Particularly important areas to look for would be clean energy, inland waterways, ports and airports. The digital infrastructure will be another critical area that the government should be interested in improving.

2. Manufacturing, Jobs and Exports: Manufacturing has the potential to create jobs not only in the manufacturing sector but also a far greater number of jobs in the service industry something known as a multiplier effect. That the 'make in India' week has been able to get pledges well over 15 lakh crore on investment is an important first step. Startup India also aims to solve the jobs conundrum which the youth of the country face. Also, exports have been falling for well over a year which is seen to be an area of concern that needs some policy level interventions. It will be important to see how the government looks at these related issues and tries to solve them.

2. Education: Education is a key sector and can broadly be divided into school education and higher education. The budget must allocate adequate resources for not just creation of new institutions but must also focus on improving the functioning of existing institutions. The priority of the government should be on ways and means to develop several academic institutions for education in various fields, and higher education opportunities need to be expanded through measures to help entry of foreign educational institutions.

3. Healthcare: For a productive population a critical prerequisite is a healthy population. The three-tier system of government needs to work alongside private hospitals to ensure people to have an adequate access to healthcare. Innovative and new age technologies can also solve some of the problems within the sector. The announcements in this area will be particularly important as there has been a feeling that healthcare has sector not been given due consideration in the present dispensation.

4. Law and order: The justice delivery mechanism in the country as a system gets delayed and to tackle the issue of pendency the government must allocate adequate resources to improve the functioning of the legal institutions of the country. There is a long felt need for improving the efficiency of the legal processes in the country.

5. Boosting the rural sector: Another fundamental challenge that is being felt is that promoting the rural sector that has lagged behind overall demand. Two consecutive seasons of scanty rainfall have led to rural distress, and the government must step in to prevent rural distress. Bank NPA's of the public sector are especially high, and that ties the hands of the banking sector and the government for not just the corporate sector but solving rural distress. It is where it is necessary to look at rural infrastructure development projects that help farmers and communities. The national agricultural market too appears as a good idea in progress.

Apart from these broader focus areas the government needs also to work on widening the income tax base so that it may reduce some of the burden that the existing taxpayers face. Overall the stage is set for a historic budget. The question is how will the government structure the resources for addressing some of these key challenges?

(The article is co-authored with Sankalp Sharma, Senior Researcher at the Institute for Competitiveness, India. Amit Kapoor is Chair, Institute for Competitiveness & Editor of Thinkers. The views expressed are personal. Amit can be reached at amit.kapoor@competitiveness.in and tweets @kautiliya)