“Focus on producer and consumer welfare to achieve sustainable growth”, CUTS International during Pre-Budget Consultations with Government of India

New Delhi (India), January 12, 2016

New Delhi

During the pre-budget consultations with social sector related groups convened by the Finance Ministry, CUTS International, an independent public policy research and advocacy organisation, headquartered in Jaipur, called for equal emphasis on producer and consumer welfare in the forthcoming budget.

Highlighting the positive relation between producer welfare and sustainable growth, it recommended adoption of a comprehensive rural reform package, focusing on rural farm and non-farm economy. This would include digitizing land records, reforming agriculture input, output and credit subsidies by benefitting from the experience of direct benefit transfer programme; introduction of graduation approach for sustainable increase in income; protecting intellectual property in agriculture sector; foster research and innovation with use of high yield seed varieties; focused attention on horticulture, improving infrastructure, providing alternate employment opportunities, etc. The Make in India programme must not be limited to Make in Urban India and rural India must be given equal importance, if not more. The Rural Reform Package could be designed and marketed on the lines of, and within the broad scope of Make in India.

Consumer welfare is equally important for sustainable development, especially in light of ordinary consumers increasingly being ripped off by dishonest investment businesses. The risk to financial consumers has augmented with increased use of technology and electronic commerce. To address the situation, CUTS Memo to Finance Minster makes a case for adoption and implementation of a strong and omnibus financial consumer protection law covering the online as well as over the counter transactions. Such law must take into account successful and not-so-successful practices implemented by various states and comparable jurisdictions. It should establish a new national single financial consumer protection mechanism (regulator), having state units/regional offices, thus covering the entire country.

Given the not-so-successful experience of pushing legislative measures, CUTS suggested government to design a package of legislative, executive and administrative efforts necessary for continuing the reform momentum. This would enable timely realignment of strategy, should one of these face roadblocks. For instance, recommendations like National Competition Policy, National Public Procurement Policy and Regulatory Impact Assessment Framework are non-legislative measures focused on ushering transparency, predictability and level playing field in policy making and implementation. It would be easier to get bipartisan support for such reforms, which complement Government’s programmes aimed at stimulating manufacturing, encouraging private investments and facilitating start-ups and innovations by removing artificial barriers to entry, operation and growth. These policies require equal implementation at states, where the action lies after the adoption of cooperative and competitive federalism principles in last budget. NITI Aayog can act as facilitator in this regard. Similar measures in other jurisdictions have resulted in measurable benefits.

While designing efficient policies is important, equally important is ensuring their effective implementation. CUTS calls for plugging capacity constraints in policy implementation by building necessary infrastructure and providing requisite training, with help from private sector, experts, and civil society.

Pradeep S. Mehta, Secretary General, CUTS while lauding Government’s initiatives on raising investment, stressed that a focused strategy was now required to achieve the goal of turning India into a ten trillion dollar economy by 2030 in absolute terms i.e. not on purchasing power parity. He added that CUTS has identified few of the critical issues which must be addressed through the forthcoming budget falling directly under the Finance & Corporate Affairs Ministry, recognizing that there are other equally deserving issues which must be addressed.

For more information, please contact:

Pradeep S Mehta

Vijay Singh