Jobs, Jobs, Jobs Please: Jamal Mecklai's Message for Jaitley
As the Budget Day draws closer, hopes are soaring with each passing day. But Jamal Mecklai, CEO of Mecklai Financial, has kept his expectations from Finance Minister Arun Jaitley simple: create more jobs and control the fiscal deficit.
Mr Mecklai said that the finance minister should focus on manufacturing sector to generate more jobs. "We need to get manufacturing (going). Jobs, jobs, jobs that is the issue. Focus on increasing employability and employment," he said. (Watch Video)
Research suggests India needs 12 million new jobs every year to absorb its bulging youth population. Manufacturing contributes just 15 per cent to India's nearly $2 trillion economy.
But Mr Mecklai cautions that the finance minister faces a tough task. "China in the past created millions of jobs by keeping is currency dramatically weak. But that was during that time. In today's environment you can't do that. If you keep currency weak, there could be inflation problem. The solution is not that simple for India," he said.
Mr Mecklai is optimistic that the finance minister will stick to the agenda of controlling the fiscal deficit. "One thing that we can be reasonably sure about Budget is that Mr Jaitley is going to stick to controlling the deficit," he said.
The finance minister has vowed to keep the fiscal deficit for 2014-15 at 4.1 per cent. According to the Fiscal Responsibility and Budget Management (FRBM) target that was set a few years ago, the fiscal deficit target has to be progressively reduced to 3.6 per cent and 3 per cent in FY16 and FY17.
Mr Mecklai is also hopeful that Mr Jaitley will announce some "subsidy-side controls". The progress on financial inclusion measures like Jan-Dhan Yojana and direct transfer of subsidy will allow some room for Jaitley to cut subsidy, he added.
RBI Rate Cut
Mr Mecklai expects the RBI to undertake quick rate cuts of up to 50 basis points after the Budget. "The inflation remains benign and growth remains weak. Besides a rate cut could help keep rupee weak and this may aid exports," he said.