Dr Ajit Ranade, the Chief Economic Advisor of Aditya Birla Group addressed the students on Union Budget 2017-18 on 11th February 2017.In the event of fiscal stress that the Indian Government is facing and macro- environment factors deemed to affect India’s growth, the talk by Dr. Ranade turned out to be extremely informative and fruitful for both students and faculties at KSOM, Bhubaneswar.
In the interactive session, Dr. Ranade spoke about India’s GDP and budget allocation as a percentage of the same. He discussed about the true picture of current Indian economy and explained the concept behind fiscal deficit. He also spoke about the macro- environmental factors which India will face due to change of guard in USA and its impact on IT & ITES industry which might lead to a weaker Rupee thereby increasing import costs. Also with India being an oil dependent country, the steady rise in crude oil prices is also a matter of concern and will lead to inflation.
It was an eye opener for many of the students when Dr. Ranade discussed about the percentage of Budget allocation to various sectors and categories. It was interesting to learn that the highest allocation is made for interest payments to Banks against the debt raised by Government.
Another critical aspect that he talked about was the issue of tax collection by the Indian government. India’s tax to gross domestic product (GDP) is approx. 9% which is low when compared to other developing nations. He explained how demonetization might help the Government to collect a higher percentage of tax in the coming years.
He concluded by stressing on the importance of collection of direct taxes. In a country having one of the highest income inequalities in the world, the channel of indirect taxes widens the gap further.