Raghuram Rajan keen on seeing Government vision in Union Budget 2022-23

Dr Raghuram Rajan - the 23rd Governor of the Reserve Bank of India has the reputation of the most popular Central banker in India to date. 

His plethora of work, his keen observation of the macro-economy and his razor-sharp analytical skills make him the go-to man every budget season.

His expectation of the Union Budget 2022-23 is no more seeing the vision of the Government going forward and the path it chooses for the next 5 years. The Union Budget shoulders the responsibility to maintain the confidence of the market and the general public at large, according to Dr Rajan in a recent interview.

As long as the ever-morphing virus is present, he cautions against excessive optimism and believes that the Indian economy is going to witness a slowdown in economic activity.

For him, the upper-middle class in India has been driving the pent up demand which has given a boost to sectors catering to those strata of the society. The real pain is in the middle class which has been pushed to lower class while lower class to poverty. The aftermath of the pandemic has been harsh to the lower strata, especially the urban lower class which has been diverted back to agriculture (a reason to worry for a growing economy).

His expectation from the Union Budget 2022-23 is - Government (both Central & State) to focus on infrastructure to boost the domestic demand for steel, cement etc while creating job opportunities for the lower working class.

He is strongly of the opinion that it is almost time for the government to shift the focus from manufacturing to service sector. While PLI Scheme has largely catered to the Manufacturing sector, more focus on upcoming services (Telemedicine, Edutech) is the need of the hour to emerge as a global service provider.

Lastly, his concerns for the neglected and hard-hit sectors (due to pandemic) needs handholding by the Government.

How his concerns are addressed by the Finance Ministry will be worth watching out for.