former-wb-economist-basu-calls-for-welfare-focus-in-budget

The Modi government needs to prioritize the welfare of ordinary citizens in the upcoming Budget and allocate more funds to the manufacturing sector to boost small businesses and create jobs, said former World Bank chief economist Kaushik Basu on Tuesday.

In an interview with PTI, Basu emphasized the importance of the government focusing on ground-level economic welfare. "I hope that, starting with the Union Budget this month, the government will turn its attention to the welfare of ordinary citizens and not just to climbing up the chart of aggregate GDP," he stated.

Despite India's overall GDP growth being positive over the last two years, Basu pointed out that this focus on aggregate statistics overlooks significant challenges such as rising inequality and high unemployment, especially youth unemployment, which is among the highest globally.

Basu highlighted that inflation affects poor families more severely than the national average of 5.08 percent and is even more pronounced compared to the inflation faced by wealthy households. 

Addressing the correlation between coalition governments and economic reforms, Basu noted that single-party, majority-run governments are generally more effective in policymaking. However, he cautioned that if the government's sole aim is to boost GDP at the expense of ordinary people, a coalition government might be more beneficial as it can moderate such policies.

Basu, currently a professor of economics at Cornell University, reflected on the recent Lok Sabha elections, where the Narendra Modi-led National Democratic Alliance (NDA), with support from N Chandrababu Naidu's TDP and Nitish Kumar's JD(U), formed the government at the Centre.

Regarding high unemployment, Basu argued that political parties have a vested interest in maintaining high youth unemployment as it provides a source of cheap labor for political activities. He expressed hope that parties would prioritize national interest over self-interest and implement job creation policies.

"At this point, the most important policy should be job creation, even though a part of the problem is global," Basu said.