The Hindu Business Line : Increase outlay for education, infrastructure

The forthcoming Union Budget presents an excellent opportunity for the Government to show that it means business in terms of fostering sustainable development, growth, and innovation – the benefits of which will go all the way to the grass roots.

The Finance Minister can choose this occasion to showcase the will of Dr Manmohan Singh’s Government to invest in and revitalise critical areas – primarily infrastructure, education, and healthcare.

Infrastructure: The state of our creaking infrastructure remains dismal despite the thousands of crores pumped into the Golden Quadrilateral and other projects. Supply is nowhere close to the growing demand. Roads, airports, power generation and other utilities are overburdened and fall short in urban areas. Rural India lags way behind.

The Rs 1-lakh crore allocated to the infrastructure sector in the interim Budget presented in February is just not enough. India needs large-scale commitment on this front.

Rural connectivity is another key area that needs to benefit from infrastructure development.

Education: The Government allocated Rs 13,100 crore towards flagship schemes in education in the 2009 interim Budget and increased outlay on higher education by 900 per cent in the 11th Five-Year Plan. However, the money is not being spent effectively and efficiently. About 22 per cent of the allocated funds of the Prarambhik Shiksha Kosh remained unspent in 2007-08.

The Government must encourage primary level institutions to move to project-based, computer-aided learning. It should also invest in high quality faculty at the primary and higher education levels. There is a clear need to increase budgetary outlay for higher education right up to the research level.

Healthcare: The fact that India needs massive investment in the healthcare sector can be gauged from these figures: the country has only 1.5 beds, 0.6 doctors and 0.08 nurses per thousand people. It spends a dismal 1 per cent of the GDP on health care. These are worrying statistics.

The Government should focus on ensuring that every Indian has access to affordable healthcare through public-private partnerships. Micro-credit institutions can be roped in to deliver health insurance – this will also ensure that their borrowers recover quickly in order to be able to repay loans. With a small contribution from each family and the government contributing the rest, affordable healthcare can easily become a reality for even the rural poor.

The US President, Mr Barack Obama, who is trying to deliver healthcare to all US citizens, spoke recently of the need for a public insurance plan. We in India can learn from the errors of developed countries to develop a National Health Scheme that delivers care to those who need it at a cost that does not kill.

Affordable medicines will play a vital role in lowering the cost of any healthcare plan. For this, the government must incentivise R&D – especially in the biotechnology sector – by providing a tax holiday for five years on any new product developed in-house. The tax holiday should come with a caveat that profits from the new product be re-invested in R&D.

This will ensure that companies remain committed to creating newer and better drugs at lower costs. In fact, this tax holiday should be extended to all kinds of biotech products whether biogenerics, diagnostics, industrial products or BT seeds.

Kiran Mazumdar-Shaw, Chairperson &

Managing Director,

Biocon Ltd

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