Former Union Finance Minister speaks about the economy & outlines solutions, during Nexus, an annual public policy competition at Indian Institute of Management, Bangalore (IIM-B)
“As long as there are absolutely necessary sectors and absolutely deserving people, subsidies must be given,” declared former Union Finance Minister P. Chidambaram while responding to a question about whether the country needs subsidy-led initiatives, during ‘Nexus’, the annual public policy competition, organized by the Forum for Industrial Interaction (FII), IIMB’s student-run business club. This year’s theme for the event was the Union Budget 2016.
In his keynote address, Chidambaram dwelt upon India’s GDP growth and said although things were looking up, the country could do better. “We must find ways to firm up the growth and raise it beyond 8%.” Some of the growth, he said, came from a “fiscal bonanza” caused by sharp global commodity and oil price corrections. “What will happen when we are not the beneficiaries of this global benevolence? When the commodity cycle turns, we will pay a price unless we fix the problems in our economy. In India, to achieve growth for job creation, government should aim at a two-fold strategy – investment in human capital and reforms of markets.”
He then turned to other economic indicators such as domestic demand and investment. “Falling domestic demand is due to the distress in rural India and the sharp decline in rural consumption. Ordinary families are facing problems with jobs, as there are no campus placements in rural India,” he added.
However, he struck an optimistic note when he declared that among the young people of India, who make up nearly 65% of the country’s population, there was hope, aspiration and energy. “Among business persons, there is innovation, creativity and the spirit of risk-talking. Among professionals, there is a competitive spirit and a desire to be among the best in the world. In many institutions there are reformers and institution builders. All these positives can be harnessed,” he said.
Chidambaram then gave away prizes to the winner and runner-up of Nexus 2016, the competition. The top 3 teams who made it to the finals included ‘TeamOne’ comprising Kota Lakshmi Narayan (PGPSEM, IIMB), ‘Team Idea!’ with K.S. Somasundaram (PGP2, IIMB) and Natarajan Ramachandran (PGP2, IIMB), and ‘Team Argumentative Indians’ with Anuradha Rao (PGP1, IIMB), Dharmendra Hiranandani (PGP1, IIMB), and Rishabh Raj (PGP1, IIMB). ‘TeamOne’ won the competition and ‘Team Idea!’ came second.
Pallavi Kamath, first-year PGP student at IIMB and member of FII, said: “This year, we asked participants to don the Finance Minister’s role and make recommendations for Budget 2016. Teams, from across the country, were encouraged to either pick a sector of their choice, or define an overall vision for what the budget should seek to achieve”. Chaitanya Kansal, also a member of FII, added: “We got proposals from over 30 teams from all over India, out of which 12 were shortlisted for presentations to a panel of judges at IIMB. Out of the 12 teams, three made their pitch at the finals”.
The panel of judges comprised Dr. Charan Singh, RBI Chair Professor of Economics, IIM Bangalore, and Prof. K.K. Sharma, Adviser and Faculty, Fiscal Policy Institute, Finance Department, Govt. of Karnataka. Dr. Charan Singh said, “This is an excellent exercise and students should actively understand what budget making is”. Professor Sharma added, “A competition like this enables students to understand the process of budget making, learn how to prioritise allocation across sectors, and appreciate the current economic situation.”