The Economic Survey was presented by the Finance Minister Nirmala Sitharaman before the Lok Sabha on 22nd July 2024. Later on, the Chief Economic Adviser of the Government addressed the public and explained the Economic Survey 2023-24.
The economic survey suggests that the tax treatment of the capital and labour incomes will play a key role in coming years, especially since the deployment of technology like AI may have a more deleterious impact on employment and income.
Globally, widening inequality is becoming a major economic challenge for policymakers. The 2022 State of Inequality in India report highlights that in India, the top 1% of earners account for 6-7% of total income, while the top 10% account for one-third.
The Indian government is prioritising this issue, implementing key policies aimed at job creation, integrating the informal sector with the formal economy, and increasing female labour force participation to effectively combat inequality.
Thus, according to the survey, the tax treatment of both capital and labour income will play a very important role. Another important aspect suggested by the Economic Survey is the De-regulation of MSMEs.
It was stated that for Medium, Small and Micro Enterprises ( MSMEs ), while bridging the credit gap remains a crucial element, the focus also needs to be on deregulation, enhancing physical and digital connectivity, and putting in place an export strategy that enables MSMEs to broaden their market exposure and scale up.
MSME entrepreneurs also need training in critical areas of enterprise management, such as human resource management, financial management, and technology. These interventions have to be targeted, tailored to the circumstances of each sector, and practical rather than academic. The productivity of owner-entrepreneurs unleashed by such training will be immense, says the Survey.
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