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16 Feb 2024
GS Paper 3
Economy
Day 77: Examine the challenges and proposed strategies outlined in the Interim Budget 2024-25 aimed at realizing the vision of 'Viksit Bharat' (Developed India) by 2047." (250 words )
- Start the answer with a discussion that sets a context for the question.
- Discuss the proposed strategies outlined in the Interim Budget 2024-25 aimed at realizing the vision of 'Viksit Bharat'.
- Mention the challenges in realizing the vision of 'Viksit Bharat' by 2047.
- Conclude suitably.
Introduction
The Interim Budget 2024-25 outlines significant challenges and proposed strategies aimed at realizing the vision of 'Viksit Bharat' by 2047. This vision reflects the government's commitment to transforming India into a developed nation with a thriving economy, inclusive growth, and sustainable development.
Body
Proposed Strategies Outlined in the Interim Budget 2024-25:
- Fostering Inclusive Growth:
- It emphasised inclusive growth strategies to tackle inequality, with a focus on the ‘Garib’ (poor), ‘Mahilayen’ (women), ‘Yuva’ (youth), and ‘Annadata’ (farmers).
- By forgoing SOPs and instead focusing on creating opportunities, it strikes a balance between growth and fiscal prudence.
- Empowering Women:
- The goal of creating 3 crore ‘Lakhpati Didis' or women with an annual income exceeding Rs one lakh – up 50% from the previous goal of 2 crore – capitalises on the success of the SHG model of development.
- Provisioning Finances:
- The provision of 30 crore Mudra Yojana loans serves as yet another catalyst, particularly in rural areas where access to formal credit systems is limited.
- Mudra Yojana loans are instrumental in bridging the financial gap as it not only boost women’s participation in the economy but also promote a culture of self-reliance and independence.
- Safeguarding Health:
- Another significant step covered in the budget is the expansion of Ayushman Bharat cover to ASHA and Anganwadi workers.
- The initiative to promote cervical cancer vaccination for young girls aged 9 to 14 years, augmented with various schemes, showcases the government’s commitment to health.
- Facilitating Basic Amenities:
- The aim to build 2 crore additional houses in villages under the PMAY-G is not only about providing shelter but also boosting related industries and creating jobs.
- Over the last ten years, the government's commitment to 'Sabka Saath' has assisted 25 crore people in breaking free from multi-dimensional poverty.
- Encouraging Innovation:
- In recognition of the youth being the driving force behind India's progress, the government plans to create a corpus fund of Rs 1 lakh crore.
- This fund is designed to support and provide long-term and easy credit access for young people, offering fifty-year loans at zero interest.
- This strategic announcement underscores the importance of technology and innovation in achieving national development.
Challenges in Realising the Vision of Viksit Bharat:
- Low Per Capita Income:
- Although India is the fastest-growing large economy in the post-pandemic phase, in terms of per capita income, it ranks 142 among 197 countries.
- According to the World Bank Definition, the ‘developed country’ tag requires the country to have an annual per capita income of USD 13,205.
- The estimated per capita income in India, at the current exchange rate, is just about USD 2,500. Thus, per capita income has to grow by over 5.3 times.
- Consistently High GDP Growth:
- Although the population is set to rise at a slower rate during the next 25 years, the annual GDP growth will have to be around 9% to achieve ‘developed country’ status in 2047.
- Concerns of Inclusive Growth:
- With declining employment elasticity of growth, absorbing an increasing number of people entering the workforce has been a challenge and will continue to be so in the next 25 years, when the population is expected to peak.
- Employability Issues:
- According to the OECD, over two-thirds of the people in the age group 23-34 have an education level below upper secondary or, at the other end, only 20% of the persons in this age group have tertiary education.
- It implies that most Indians cannot qualify for high-paying service sector jobs in IT, IT-enabled services, finance, and other business services.
- Skewed Manufacturing Sector:
- India’s labour-intensive manufacturing employment is concentrated in firms with fewer than 20 workers, China’s is concentrated in 1000+ worker firms, with much higher productivity.
- Thus, good jobs will mainly have to be created in relatively large, formal-sector manufacturing firms in labour-intensive industries.
Conclusion
The challenges outlined in the Interim Budget 2024-25 are significant, but the proposed strategies demonstrate a clear vision and commitment towards realizing 'Viksit Bharat' by 2047. With a focus on economic growth, infrastructure development and environmental sustainability, India is poised to achieve its goal of becoming a developed nation in the near future