There should be measures to help the poor and MSME in the budget, this will bring the economy back on track
Stock markets are currently moving around record highs. Hence former RBI Governor Raghuram Rajan suggests that the government should sell its stake in companies at this time. In an interview, he said that it is time to help poor families and MSMEs. This will bring the economy back on track.
Best way to increase spending on infrastructure
Rajan has made these suggestions for the next budget. He says that the best way to bring the economy back on track is to increase government spending on infrastructure. States account for more than half of government spending, so they should be given money. The General Budget for FY 2021-22 will be presented on 1 February.
Rajan’s question – Why the government is not selling the shares of companies?
There is also a fear of increasing losses on increasing expenditure. Rajan, therefore, suggested selling stakes in government companies. He said, “If you have money problems then you should sell the shares. Why is the government not doing this? Who is stopping it? If I were, I would have taken advantage of the stock market height now.”
66 lakh crore loss to the economy till the situation improves
GDP declined by 23.9% in April-June 2020. There was also a negative growth of 7.5% in the July-September quarter. Rajan said it is certain that the situation will change. But the question is, what are we doing to change the situation? The World Bank estimates that by the time the situation improves, our economy would have lost $900 billion (Rs 66 lakh crore). It is one-third of our GDP.
The economy will move forward due to fundamental reasons, not due to government
Rajan estimates that India’s economy will not reach the level before the Corona epidemic before the second half of 2022. The economy will only grow for its fundamental reasons, not because of increased spending from the government. We need to create jobs for the crores of people who are joining our labor force every year.
