Indian Budget 2008 Stands a Model for the World

Indian Budget 2008 stands as a model with focus on development for
the world and most apt for emerging economies. This budget is both transformational
and historic with respect to the treatment it offers on social, economic,
gender, educational, culture, inclusive growth, class equality and developmental
issues.

Some elements of the budget will continue to create positive and exponential
network effect on the economy over several decades like the financial
market infrastructure and its cross -linkages to the rest of the economy
and the announcement of a green exchange.

The pillar of any developed economy is robust, vibrant and liquid
financial market with support institutions. The announcement of green
exchange and the emphasis on SME, bond and currency exchange has accorded
the finance minister a rare global honor of being responsible for providing
the enabling environment for creation of most of the financial market
infrastructure during his multiple tenures as finance minister.

This includes a stock exchange, bond exchange, derivatives exchange,
depository and the recently announced green exchange. History shows
that globally when the financial market system matures, it benefits
the masses to the tune of hundreds of millions of people. There are
four pillars of modern financial market infrastructure – stocks, commodities,
bonds and currency.

While India can presently take pride for a well-developed stock market
and an emerging commodity derivatives market, the emphasis has now rightly
shifted to the green exchange, SME exchange, structured bonds and currency
derivative markets.

This, along with the right global linkages to the above financial markets,
when permitted by the government, will provide the inflection point
in the emergence of India as an International Financial Centre (IFC).

On one hand , the budget provides for good resources for rural development
, education , agriculture and farmers and Infrastructure development
, simultaneously speaks of structured trading platform for carbon credit
, where India have got potential for becoming a leading global player
and it rationalizes excise duty for making industry more cost competitive.

The budget model have benefited India immensely during the last few
years , specifically in commodities , as there has been large rural
investment, employment and development of forward and backward linkages
within the economy.

Photo: Kolkata- Life on Howrah bridge (8237049112) by Abhijit Kar Gupta from Kolkata, India, licensed under CC BY 2.0, via Wikimedia Commons.