Union Budget 2024: Focus on citizen welfare and manufacturing, says former World Bank chief economist

The government must focus on citizen welfare and give more funds for the manufacturing sector to boost small businesses and create more jobs, said Kaushik Basu.

As the Union Budget 2024 is scheduled to be presented next week on July 23, the government must focus on the welfare of ordinary citizens and allocate more funds for the manufacturing sector to boost small businesses and create more jobs, Kaushik Basu said in an interview with PTI.

Kaushik Basu, former chief economic adviser to the PM as well as former World Bank chief economist

Who is Kaushik Basu?

Kaushik Basu was the chief economist of the World Bank from 2012 to 2016 and served as the chief economic adviser to the Indian government from 2009 to 2012. He is currently the C. Marks Professor of International Studies and Professor of Economics at Cornell University.

What does Kaushik Basu say on India's GDP growth and inflation?

Basu said that though India's overall GDP growth over the last two years has been good, focusing so much on GDP leads to two major ground-level challenges India is facing, which includes steeply rising inequality and high unemployment. India's youth unemployment is among the highest in the world, he added.

The inflation faced by poor families is much greater than the national average of 5.08 per cent and the inflation that rich households face, he said.

What does Kaushik Basu feel about the new coalition government?

The RBI's inflation target is 4%, with a margin of 2% on either side.

The Narendra Modi-led National Democratic Alliance (NDA) crossed the halfway mark in the 2024 Lok Sabha elections with support from N Chandrababu Naidu's TDP and Nitish Kumar-led JD(U), and other alliance partners.

Basu said that while single-party, majority-run governments are typically more effective in making policy, a coalition government which doesn't just focus on increasing GDP numbers is better for the country.

What does Kaushik Basu say on unemployment and youth unemployment?

In 2022, unemployed youths accounted for nearly 83% of India's total unemployed population, according to an International Labour Organization (ILO) report.

All political parties have a self-interest in high youth unemployment since this is their source of cheap labour from political volunteers, he said, expressing hope that the parties would rise above their own interest and implement policies in the interest of the nation, which is job creation.

He also felt that though unemployment is a global issue due to technological advancements leading to declining demand for labour, India where labour is cheap can still increase its demand for it, just like countries such as Vietnam that do it successfully.