Budget 2021-22 should include an industrial strategy to enable convergence in government policy initiatives: CUTS International

PNI News, November 30, 2020

The Ministry of Finance has invited suggestions from the public for the Budget 2021-22. In its submission, CUTS International, global public policy research and advocacy group, has highlighted the need to avoid inconsistencies in design and implementation of government policies.

To recover from adverse impact of covid-19 pandemic, while the government has launched the ‘Atmanirbhar Bharat’ package, legacy issues may constrain us from realising its potential.

These legacy issues pertain to lack of convergent approach in design and implementation of policies. For instance, while the policy objective is to promote manufacturing, import of inputs or intermediate products is expensive than import of finished goods. Despite the need for innovation, limited incentives exist for investment in research, development, and skill development.

Uncertainty and frequent changes in taxation, unreliable and expensive raw material, logistics, and power costs have prevented industry from competing internationally. Pradeep S Mehta, Secretary General, CUTS International, has called for an industrial strategy to implement whole of government systems approach in policy design and implementation, and achieving convergence.

Lack of convergence has resulted in sub-optimal competition, disproportionate regulation, limited capacity of the third tier of governance, and excessive focus on digital technology without adequate governance mechanisms.

To address such issues, Mehta stresses on the need for adoption of National Competition Policy and Regulatory Impact Assessment with creation of decent income generation opportunities as key policy objective. All existing policies should be subjected on this threshold through a three-fold test of legality, necessity, and proportionality, on a periodic basis.

Adoption of such frameworks will aid in creating a level playing field for the public and private sector, taking into account concerns of citizens, workers, informal and micro enterprises, and enable tripartism between government, industry, and workers.

Bipul Chatterjee, Executive Director, CUTS International, pointed out that there is a need to empower local self -governments to raise money from markets through instruments like municipal bonds. The centre should create a separate fund for providing technical assistance and capacity building support to local bodies, with matching grant from states. This can ensure better ‘ease of living’ in urban areas.

While lauding government’s thrust on technology enabled public service delivery, Chatterjee pointed out that there is a need to reduce exclusion errors, address privacy and data protection concerns, and foster greater thrust to technology.

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