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Budget 2024: Focus on Jobs, Skills, and Innovation
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Context
The upcoming Union Budget, expected in late July, is anticipated to set the tone for Modi 3.0 government's economic policies, with a focus on job creation, skill development, and innovation.
Key Budget Priorities:
- Employment and Skill Development: Renaming of Cabinet Committee to include 'Skill' and 'Livelihood' indicates a broader approach to job creation and skill enhancement.
- Housing and Infrastructure: Cabinet decision to provide assistance for 30 million additional houses under PMAY signals focus on welfare schemes and potential job creation.
- Research and Innovation: Previous allocation of Rs 1 trillion corpus for technology research indicates growing emphasis on R&D and innovation.
Challenges and Opportunities:
- R&D Expenditure: India's R&D spend at less than 1% of GDP lags behind countries like US, Germany, China, and South Korea.
- Private Sector Involvement: Private sector's gross domestic expenditure on R&D (GERD) in India is below 40%, compared to 65-70% in innovation-focused countries.
- Industry-Academia Collaboration: Need for enhanced partnerships between industry and academic institutions, both domestic and international, especially in sectors like semiconductors and electronics.
Proposed Economic Reforms:
- Tax Regime Overhaul: Suggestions include cleaning up direct tax regime across asset classes to encourage financial savings and broaden capital markets.
- Trade Facilitation: Proposals for reducing customs tariffs, encouraging participation in global supply chains, and actively signing free-trade agreements.
- Agricultural Productivity: Recommendation to set up a "productivity commission" for agriculture and allied sectors to boost farm incomes.
UPSC Mains Questions:
Q. "India's low R&D expenditure is a major hurdle in becoming a global innovation hub." Discuss this statement in light of the government's recent budget allocations and policies for research and development.
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