The Indian Institute of Management Kozhikode (IIMK) hosted a significant Pre-Budget Analysis Summit on July 6, 2024, themed “India’s Economic Ascendancy: Roadmap to 2047”, bringing together prominent economists, industry leaders, policymakers, and academicians. The distinguished panel for the summit included Mr. Dharmakirti Joshi, Chief Economist at CRISIL; Mr. George Alexander Muthoot, Managing Director of Muthoot Group; Dr. V.K Vijayakumar, Chief Investment Strategist at Geojit; and Dr. Mridul Saggar, Professor at IIM Kozhikode and former Executive Director of the Reserve Bank of India (RBI).
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The experts provided valuable insights into fiscal policies, economic growth prospects, and strategic financial management. Key points discussed during the summit were:
- Investment by Private sector: The panel highlighted the critical issue of less than 4% investment from private corporations and the need for accelerating private investment, which has not kept pace despite strong financials.
- Employment and Consumption: Emphasis was placed on generating employment in rural areas to boost consumption, underscoring the importance of measuring consumption metrics. Prof. Mridul Saggar, cautioned that while jobs were being lost as AI-ML is changing the future of work, the idea of Robot Tax was ahead of time in the Indian context and India was somewhat behind the curve in the global race on this Tech segment. So, we should encourage innovations through AI-ML and allow the process of creative destruction to take place.
- Retail Debt Market: Mr. George Muthoot and Dr. Vijaykumar called for improvement in the retail debt market, particularly in the retail sector, along with a call for reviewing the attractiveness of non-convertible debentures (NCDs) for retail investors.
- Fiscal and Monetary Policies: Prof. Saggar said that the record RBI surplus transfer of Rs. 2.11 lakh crore is a windfall and other things remaining the same provides the Union government an added delta of 0.4% over the interim budget, much of which could be used for fiscal consolidation, though some of it could be used the step up capital expenditures which were kept flat in the interim budget. The conservative nominal GDP growth assumption of 11% in the Interim budget also provided added space as the nominal GDP growth could easily be an extra 0.5%This provides a good opportunity for creating lowering GFD/GDP ratio to 4.8% in the final budget to provide fiscal space for future countercyclical expansion should the need arise due to possible slowdown on back of geopolitical fragmentation. Panelists also voiced concern over deterioration in fiscal position of some States.
- Economic Status and Supply Chain: While the market needs stability, the panel acknowledged that the supply chain remains a focal point. They noted that the K-shaped recovery and rising luxury consumption are indicative of economic disparities.
- Sectoral Focus: The summit emphasized the potential for growth in semiconductors, electric vehicles (EVs), and electronics, alongside the need to boost manufacturing and back the MSME sector.
- Taxation and Public Spending: Discussions included the low tax-to-GDP ratio and the imperative for the government to take measures to address this. The need to rationalize spending on education, which currently stands at 3% of GDP, was also highlighted.
- Energy and Labour: High power costs in India were identified as a concern, along with the increasing labour force and the associated employability challenges.
- Specialization and Education: The panel suggested that India needs to identify sectors for specialization to become an industrial hub. They also called for more support for the education sector by doubling the public sector spend on education.
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Earlier, in his welcome address, Prof. Joshy Joseph, Chairperson of IIMK Kochi Campus, highlighted the importance of such forums in fostering comprehensive and inclusive economic discussions. He stated, this event holds a unique importance, as the discussions and insights generated here have the potential to offer critical suggestions for the upcoming union budget. He also added that this is a rare and invaluable opportunity for students to engage with and learn from the brightest minds in the field, witnessing first-hand the complexities and responsibilities of economic policy-making.
The summit also featured interactive sessions, allowing participants to engage directly with the panellists and explore various economic scenarios and their potential outcomes. The summit concluded with a consensus on the necessity for strategic policies and government backing to ensure India’s economic growth and development in the coming decades.
About IIM Kozhikode: The fifth IIM to be established by Govt. of India in 1996, IIMK started its academic journey in 1997 with its flagship Postgraduate Program (PGP). The Institute is on a high growth trajectory today, offering widest range of academic programs in the field of management education. These include Doctoral Programme in Management (PhD), Executive PG Programmes, Management Development Programmes and Faculty Development Programs. IIMK set up a Satellite campus at Infopark, Kochi, in 2013 dedicated to Executive Education. IIMK has also the unique distinction of launching a PhD (Practice Track) programme for working professionals besides bringing in new dynamic courses like one-year Post Graduate programme in Business Leadership (2019) MBA in Finance and MBA in Liberal Studies & Management (2020). The institute is also home to IIMK LIVE a first-of-its-kind startup incubation programme, the Indian Business Museum and six other Centres of Excellences encompassing diverse areas. IIMK is ranked 3rd as per NIRF India Rankings 2023: Management. The institute also made its global debut for its flagship MBA and EMBA programme in the 2020/21 QS World University Rankings. In 2023, IIM Kozhikode also broke into Top-100 in Financial Times Ranking for Masters in Management (MBA) (Rank #77) and attained global rank #70 in the FT Open Enrollment Programme for 2024. The Institute is globally accredited by EQUIS (EFMD) and AMBA (UK).
