Letters: Cash in on opportunity

This refers to the report, "Govt gets Rs 1-lakh-crore spend cushion for FY 16" (July 23). Budgeting is not pure mathematics; it has to take into account economic and social planning. The central allocation of budgetary funds to states will let them tap available resources effectively. Reduction and removal of central subsidy and passing this responsibility on to the states will ensure better returns and qualitative use of funds through better monitoring and lesser political interference.

Internal budgeting is affected by global economic and political trends, for example, the drop in oil prices that has cut cost of production in agriculture and the industry throughout the country. The Centre should capitalise on this rare opportunity of a surplus "spend cushion" for long-term capital investment in infrastructure.

A growing economy calls for continued capital expansion. This will strengthen foundations by way of better connectivity between rural and urban areas and ensure accessibility to a wider range of markets. This will benefit international trade, improve external trade balance and beef up foreign exchange reserves. Similarly, global market challenges can be met more effectively with technological advancement to improve product quality, for which capital investment is essential.

Funding social activities can be left to the industry by way of their fulfilling the requirement of corporate social responsibility, besides contribution from other social welfare institutions and state-sponsored developmental activities.

C Gopinath Nair Bengaluru

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