[Union Budget 2018-19] Sectors that needs Attention

[Union Budget 2018-19] Sectors that needs Attention


The sectors were compared and analyzed according to the trend in past years and their allotments, both based on its total shares to the total expenditure and the percentage growth in allocation in the previous post. Now, the sectors that needs attention are to be considered. These sectors are basically analyzed through the govt.’s expenditure for the past years, with a holistic view on the growth aspects of sectors including health, education, employment etc. Here are some of the sectors which needs attention;

Micro Small and Medium Enterprises  

Micro, Small & Medium enterprises or MSME is the pillar of economic growth in many developed, and developing countries in the world. Often rightly termed as “the engine of growth” for India, MSME has played a prominent role in the development of the country in terms of creating employment opportunities-MSME has employed more than 50 million people, scaling manufacturing capabilities, curtailing regional disparities, balancing the distribution of wealth, and contributing to the GDP-MSME sector forms 8% of GDP. Comprehensive training programmes are organized to upgrade skills of prospective entrepreneurs, existing workforce and also develop skills of new workers and technicians of MSEs by organising various technical cum skill development training programmes with the basic objectives to provide training for their skill upgradation and to equip them with better and improved technological skills of production. Former president Pranab Mukherjee once said “by 2020 the average age of people in the US will be 46 years, that in Europe 42 years, 48 years in Japan and just 27 in India. So we have the opportunity to capture the job market". As he mentioned, it’s an opportunity to capture the job market, but if not taken seriously then the demographic dividend may become liability without skill development. Investment in basic research and development is necessary. Also investments in MSME can create more job opportunities and training for skill development.

Healthcare

A comparison of the basic health indicators clearly indicates that developed nations of the world, are far better on healthcare provision and utilization, when compared to the developing nations. This is evident from the figures shown in the World Health Statistics, released by World Health Organization (WHO) in 2014. For example, in a developed country like Germany, the government shares 77% of all the national expenses made on health. Similar figures for a developing country like India stands at 30.03%. Despite the lowest government spend and public spend, as a proportion of gross domestic product (GDP) and the lowest per capita health spend – China spends 5.6 times more, the US 125 times more – Indians met more than 62% of their health expenses from their personal savings, called “out-of-pocket expenses”, compared with 13.4% in the US, 10% in the UK and 54% in China. Today, various government bodies, both at the national and the state level, are making concerted efforts to improve the healthcare scenario in the country. However, there are still remaining stiff challenges at the policy as well as execution level which are roadblocks on the path to achieve the health related goals.

Agriculture

Importance of agriculture in the national economy can be summarized in the following points; Around 22-27% of population and half of the labour force dependent on agriculture and 18% of India’s GDP comes from this sector as per latest numbers. Good crops increase purchasing power of the farmers, which leads to greater demand for manufactured products. Thus prosperity of farmers leads to prosperity of other industries. We note that rural markets are a large segment of market for durable products also. Failure of agriculture can derail the whole economic planning. This lesson was learnt during second and third five year plans and also in early 2000s. Most of the internal trade in the country is in agricultural products. Agricultural growth has direct impact on poverty eradication; it is important factor in containing inflation; raising farm wages and employment generation. Allied sectors such as horticulture, animal husbandry, dairy and fisheries have an important role in improving the overall economic conditions and health and nutrition of the masses. Given the demand deficiency argument the rural income has to go up. One possible area of intervention in this regard is an increased allocation to the Agriculture sector.

Education 

The importance of Education is today’s need as it is the not only the development of intellectual skills and knowledge but also to effective growth and development of Indian Economy. The Education system needs to make students as learner’s innovators, scholars, researchers and trainers. Education is a fundamental human right and it helps to promote individual freedom and empowerment and propagates important development benefits. The Indian government started the right to free and compulsory education (RTE) act, 2009 for making education compulsory and fundamental right of every child. The latest Education for All Global Monitoring Report (GMR) — released worldwide by the UNESCO , acknowledges the headway made by India in improving access to education but the country’s population of illiterate adults has been identified as the drag factor.

India currently has the largest population of illiterate adults in the world with 287 million. This is 37 per cent of the global total. While India’s literacy rate rose from 48 per cent in 1991 to 63 per cent in 2006, “population growth cancelled the gains so there was no change in the number of illiterate adults,” the report stated. According to the report, India — despite spending a considerable amount on education — has reduced its expenditure on education from 13 per cent of the entire government budget in 1999 to 10 per cent in 2010.

Conclusion

A nations growth should be from a holistic path, or for the development of the nation, there are other factors and sectors to look forward, they are, MSME (skill development), healthcare, agriculture and education; these sectors also needs a greater amount of budget allocation from the previous years, only after that we can say India is developing holistically. After all growth is for whom?
[Union Budget 2018-19] Anticipated allocations to various sectors

[Union Budget 2018-19] Anticipated allocations to various sectors

Union budget is a comprehensive statement of the government's finance including spending, revenues, deficit or surplus, and debt, for the fiscal year that runs from April 1 to March 31. It is a statement of estimated receipts and expenditure of the government for every financial year. Budget plays a very important role in an economy since it is a framework on which government applies the policies related to revenue and expenditure. It helps the economy to identify the weaknesses and work in an efficient way. Government budget is a broad concept comprising of:
  1. Revenue budget: The current receipts of the government and the expenditure that can be met from these receipts.
  2. Capital budget: The requirements of the government and the method of their financing.
  3. Revenue deficit refers to the excess of revenue expenditure over revenue receipts.
  4. Fiscal deficit is the difference between the Revenue receipts plus Non-debt Capital Receipts (NDCR) and the total expenditure. This indicates the total borrowing requirements of Government from all sources.

Allocation of budget based on shares 

Since in every year the share remains almost same. For example, in tab le 1, “Interest Payments”, was 441658.9 during 2015-16, 483068.9 in 2016-17 and 523078.4 in 2017-18. There is no significant change in shares in this department since the interest payments are always given higher shares compared to other sectors every year, and it is obvious that the same trend would be followed in future too. If this criteria is followed, the budget 2018-19 will also have the following sectors on top priority with highest budget allotment as shown in table 2.

Table 1 : Expenditure of Ministries and departments
Table 2 : Rank based on shares by each sector
From table 2, it is evident that the following sectors are allocated major shares:
  1. Interest Payments 
  2. Infrastructure 
  3. Defence services
  4. Department of Food and Public Distribution 
  5. Transfer to States
The sectors like interest payments, transfer to states, pension etc. come under committed expenses, which are having no returns and are planned beforehand, hence these sectors are excluded from this analysis. Budget plays a very important role because it is a framework on which government applies the policies related to revenue and expenditure. It helps the economy to work in an efficient way and to identify the weakness. The remaining sectors include:
  1. Infrastructure 
  2. Defence services
  3. Department of Food and Public Distribution
  4. Department of Rural Development 
  5. Capital Outlay on Defence Services 
In the above mentioned sectors it is observed that the share for infrastructure was more, followed by Defence services, Department of Food and Public Distribution, Department of Rural Development and Capital Outlay on Defence Services. It is almost obvious that this trend will be followed in the upcoming budget 2018-19 too, as there is no significant difference in shares of each sector for the past 3 years, as shown in fig 1.

Figure 1: Sector-wise % Allocation (2015-18)

The annual percentage growth of few sectors out of 100 different sectors is calculated and compared for the last three year budgets. This method was adopted to examine whether there is any boost in any particular sector for the last year in terms of percentage. In this case only individual percentage change matters. In table 3, percentage growth in allocation for last years are mentioned,

Table 3: Sector-wise percentage growth in allocation

The fig. 2 is the graphical representation of table 3, which shows the sectors having an increase in allocation of budget and vise-versa.

Table 4: Percentage growth in allocation

From the fig.2, it is clearly that the following sectors are getting a boost in allocation of budget for the past 3 years (Modi. Govt.);
  1. Agriculture sector, the rate of growth of allocation is 1.23%, which is the highest among other sectors.
  2. Defence Services, The rate of growth of allocation is 0.62%, which is far behind that of agriculture sector.
  3. Department of Urban Development, The rate of growth of allocation is 0.61%.
  4. Defence Pensions, The rate of growth of allocation is 0.58%.
  5. Infrastructure, The rate of growth of allocation is 0.51, which includes roads, railways etc.

Conclusion

Wrapping up all, Union budget of India is one of the most important policy for allocating budget across many sectors in India. While analyzing past three years data, it is observed that sectors like interest payments, infrastructure, defence services get the highest shares; With regard to shares of sectors which have shares other than committed expenditure, then infrastructure, defence service, department of food and public distribution gets the highest shares; When percentage growth of allocation of budget is the criteria, it’s another deal, agriculture sector, defence sector, department of urban development, have the highest figures.
Top Universities in India for Economics Master's

Top Universities in India for Economics Master's

Past years, we had seen a plethora of parents forcing their children to pursue in either Engineering or Medical streams as their Degree. But now it seems the trend has changed. It might be due to the trend of not getting jobs even after doing such engineering degrees. Yes, still parents send, but the percentage has come down. Now students mostly pursue their degree in what they like. They choose streams other than Engineering and Medical, like Economics, Designing, Commerce, Mathematics, Physics, etc. Nowadays Economics is also a trending and evolving subject, which has to do plenty of things with our day to day lives. The demand for Economics is rising, so as the demand for better institutes. Earlier, only students from Arts and Commerce background used to choose Economics as their Career, but now in India the even students from the science stream opt for Economics. This article is specifically for the Undergraduate students who are currently pursuing Economics or those who wish to pursue Economics Masters Program.

The top universities basically treat Economics purely quantitative, so it is advisable that the ones who are willing to pursue their career in these universities must have a good grip in mathematics as well as statistics. Most of these universities look for your subject foundation. In Economics, the main focus areas are Microeconomics and Macroeconomics, every university listed here requires to have intensive undergraduate level knowledge on these topics.

The following are the list of the top universities in India which offers Master of Arts/Science in Economics and Quantitative Economics.

  1. Indian Statistical Institute
  2. Delhi School of Economics
  3. Jawaharlal Nehru University
  4. Indira Gandhi Institute for Research and Development
  5. Madras School of Economics
  6. Gokhale Institute for Economics and Political Science