KOMAN.CO.IN
The Union Government is to present its interim Budget, the last in its second term on February 1, 2024. This government undertook major economic reforms in the first term – GST implementation, Corporate Income-Tax reforms. During that period, around 2019, the economic situation is somewhat subdued, followed by the Covid-19 phase till 2021-22.
However, the condition aftermath of Covid-19 is phase of recovery and due to sharp contraction earlier, the growth rate was shown progressive, in the subsequent financial years 2022 and 2023 at 8.7% and 7% and in 2024 the estimated growth pegged at 7.3%.
In order to get away from the economic contraction due to God’s act like Covid-19, the government has initiated lots of government performing sectors such as expanding infrastructure and build public assets, which will support the growth in the long-run.
In all the government’s initiatives are fared well in terms of improving growth rate, but the moot question here will be, “whether it (growth rate) will be sustainable.” This doubt or confusion provoked due to prevailing of the large-scale unemployment in the system. Accordingly, the growth was termed as ‘jobless growth’.
Notwithstanding the criticism that jobless growth is not a proper economic growth, it would be an ideal way to promote higher growth in order to face aggressive global challenges on one-side and community-shock due to Covid-19 on the other. In fact, the infrastructure projects pursued by the government could not generate required jobs as the projects engaged high-end technologies. Thus, the building large-scale infrastructure did not focused the employment generation.
Debate on the GST Council
The GST reforms are in transitional and the story is still not complete. There is lot of stand-off between the Centre and States over the issue of distribution of the revenue. It would be unwise to deliberate on the issue of Centre-State relations in isolation, where there are good number of conflicts between Chief Ministers and Governors. On one side, the GST regime controls the flow of monies by the Central agencies; the States are facing stress while implementing welfare schemes.
In a way, the States have no financial freedom. Although, one cannot say that the GST regime may be reversible, but the proactive relations between State and Centre would always leverage in finding solutions to the State financial needs.
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