fiscal discipline took backseat in budget: Cornell economist

Washington : Fiscal discipline has taken a backseat in the latest annual Union Budget which contains many tinges of populism, noted Indian economist Eswar Prasad said on Friday. Prasad, a professor of trade policy at the prestigious Cornell University, said there were no major measures in the budget that could stimulate private investment. “Fiscal discipline has taken a backseat in this Budget, which contains many tinges of populism, as was to be expected in the run-up to a national election cycle,” Prasad told PTI. “There are no major measures that could stimulate private investments, which has been notably weak even during the recent period of high growth,” Prasad said. However, the proposed new health insurance scheme and other measures that will in principle directly benefit the poor are welcome, Prasad said. “Although it is unclear how exactly some of these programmes will be funded within the budget envelope,” he said. US India Business Council (USIBC) president Nisha Desai Biswal said the government has displayed its commitment to areas that will benefit India’s growth and prosperity for many years to come. “Infrastructure development, access to health care, affordable housing, energy, and education for all citizens form the backbone of any growing economy… American industry is committed to growing, strengthening, and sustaining these areas of collaboration with India,” Biswal said. In the last three years, Biswal said, India has been on a robust path to growth, backed by a strong economic reform agenda.  Karun Rishi, president of USA-India Chamber of Commerce, said the Budget carefully balances the essentials of accelerating growth and fiscal prudence. Focus on agriculture and health is a game changer, he said. “We commend Finance Minister Arun Jaitley for his ambitious, out of the box thinking by covering the bottom 40 per cent of all households under the health insurance scheme – ‘Ayushman Bharat’,” Rishi told PTI, adding that this “bold and pragmatic” step will help the poor and low income families. ‘Ayushman Bharat’ is aimed at benefiting 10 crore poor families by providing coverage of up to Rs 5 lakh per family per year for secondary and tertiary care hospitalisation. An outlay of close to 10 per cent of the GDP in the agro-rural sector will boost rural and farmers’ incomes, leading to a rise in consumption and consumer durables demand, he said.