Budget 2022: no Indian should be left behind
Oye’s tragic story, multiplied by half a billion times, creates a bewildering dichotomy
This is the bittersweet conundrum of India’s ‘miracle’ – but also ‘in crisis’ economy. The Titans, Cromes, Reliance Digital, Zomatos and Swiggys have wiped out the struggling “heroes” of our informal economy. The big guys have usurped their market share to record record gains in income, profitability and valuation. The whole world is serenading India to ‘formalize and digitalize its economy’ at one of the fastest rates in history – according to one estimate, the share of the informal sector, which was buzzing at over 60% of the economy. GDP before 2016, halved in half a decade. It’s brutal. It also explains the incredibly dichotomous data points of the Indian economy:
Corporate taxes rose 75% even as total GDP remained stable for two years
Stock markets are at record highs (even after slowing nearly 10% towards the end of 2021), as the global economy falters in the face of a recurring pandemic
Private final consumption expenditure (PFCE) is lower than two years ago, but the prices of consumer items are falling; FMCG companies are surprised at their own pricing power
Large employers – especially those who are digitizing quickly – face an incredible wage spiral, while unskilled workers are tragically unemployed; rural poor are joining livelihood programs like MNREGS in record numbers
The above dichotomy can be summed up in one dangerously split sentence: India’s formal economy is booming, while the informal economy, which is the lifeline of more than half a billion dollars. poor citizens, is destroyed.
Do not mistake yourself. It is not my case that formalizing our economy is a bad thing. In fact, it is a goal that we have wanted for a long time.
We need to provide education, health, recycling and mass absorption in manufacturing and service industries, a process spanning several years, perhaps a decade, during which the formal economy will gradually usurp the informal sectors, instead of destroying them in some way. years, no, months.
This is therefore the challenge facing the 2022 budget. This is why we, at BloombergQuint have chosen this theme, i.e. Budget 2022: No Indian left behind.