Arthashastra 4.0: Unveiling the Union Budget 2024

Arthashastra 4.0, held at SCMHRD Pune, was a pivotal event that dissected the Union Budget 2024, highlighting infrastructure’s role in propelling economic growth and the challenges of managing a fiscal deficit between 8 to 9%. The discussions underscored the need for fiscal consolidation, efficient subsidy distribution, and addressed concerns about fiscal profligacy among states. The dialogue extended to the intricacies of government borrowing, bond markets, and the potential of overseas investment in Indian bonds.

Agricultural policy challenges, particularly around MSP and the call for consensus on reforms, were deliberated. The event also emphasized the critical investment in education and skill development, framing it as essential for long-term growth. Finally, the conversations delved into the political and market realities of achieving divestment targets, especially in the banking and energy sectors, underlining the importance of timely and efficient execution.

The discussion emphasized the critical need for infrastructure development to boost economic growth, highlighting the multiplier effect of such investments. Concerns were raised about fiscal deficits, with a combined fiscal deficit of 8 to 9% being deemed high and affecting India’s international credit ratings. The conversation touched upon the issue of fiscally profligate states, the distribution of food under the NFSA, and the leakage of subsidized goods into the market. The importance of fiscal consolidation by the government was acknowledged, alongside the need for addressing leakages and ensuring efficient subsidy distribution.

The dialogue also explored the impact of government borrowing and bond markets, including the potential for increased overseas investment in Indian bonds and the implications for interest rates. Discussion on agricultural policies highlighted the challenges of MSP, the inconsistency in agricultural policy, and the need for consensus among states on major reforms. The conversation shifted to the importance of investment in education and skill development, emphasizing that education is an investment, not an expenditure.

Finally, the panel discussed divestment targets as a balancing figure for fiscal deficit calculations, questioning the political will for significant divestments in sectors like banking and energy. The challenges of executing divestments timely and efficiently were acknowledged, along with the necessity for a market appetite for successful divestment efforts