There has been a rising cacophony of voices advising the central government on how to approach the next fiscal year.
If anything, the voices have been louder and more insistent than normal. This reflects the growing sense of urgency and even a slight sense of panic that has seized India Inc., which has apparently realised that the great Indian economic growth story may be in the process of unravelling.
Thus, there is much angst about the deceleration of the GDP growth rate to an estimated annual rate of 6.1 per cent in the third quarter of the current fiscal year, and concern that the gloomy global economic scenario will act as a further depressant on domestic growth.
Exports are already affected by the changes not only in the US and European economies. They are likely to be affected even more importantly by the shift currently occurring in China, which is also looking to rebalance its own production more towards meeting domestic demand.
Within the country, the concerns range from dealing with internal and external imbalances to the slowing down of growth.
And the prescriptions of course vary dramatically, depending upon not just the diagnosis of the disease but even what is identified as the disease in the first place.
There is one set of analysts and observers for whom GDP growth is all that matters, and they are relatively less concerned about how much of that growth is "trickling down" or how much employment it generates or whether it is ecologically sustainable.
Within this group, it is common to accept that GDP growth must be powered by private investment, and therefore that maintaining or improving "investor sentiment" is the most critical task for government. This in turn leads to the belief that "reforms" in the form of greater privatisation and easing rules for foreign investment in various activities (including FDI in retail, banking and so on) is the best way to improve the confidence of investors.
This is the group that has been tut-tutting about the sclerosis within the UPA government that has prevented it from taking "tough" measures. Such so-called tough measures include not just the actions just mentioned, but attempts to rein in the fiscal deficit by cutting spending on subsidies on food and fuel, and raising indirect taxes. It is interesting that toughness is never seen as desirable when applied to corporate taxes, as that is supposed to be "anti-growth".
The gloom and frustration in this camp has only been accentuated by the results of the recent Assembly elections in five states.
The poor electoral showing of the Congress Party, especially in Uttar Pradesh, has been cited as one factor that may reduce the appetite of the central government for the kind of actions they desire.
It is now feared that in the coming Union Budget, the Finance Minister will avoid the required fiscal consolidation for fear of further political backlash. The concern that is being expressed is that, instead, there will be more "populist" measures, rather than what they perceive of as "growth" measures - which are essentially more carrots for private business.
But suppose we decide to look at the economy differently - not solely in terms of GDP growth, but rather in terms of the material conditions of most of the people living in the country. (It turns out that even electorally speaking, this might be the wiser thing for the parties in power at the central government to do.)
Then the variables that need to be looked at are quite different: employment generation, especially regular employment in formal sector activities; prices of essential goods, especially food, in relation to wage incomes; livelihood conditions of small producers in both agriculture and non-agriculture; access to good quality social services like health and education at affordable rates; availability of essential infrastructure like paved roads.
If these become the priorities, then it is only too obvious that we need not less public spending but much more of it. So, the focus should not be on cutting down, but rather increasing government expenditure in these essential areas, and in providing more fiscal transfers to state governments that are primarily responsible for delivery of all of these in the Indian federal system.
Of course people will immediately reply that it is crazy and irresponsible to suggest this when the fiscal deficit is already seen as too high.
But in fact such spending need not even involve a higher fiscal deficit. Rather, the time has definitely come to tax the beneficiaries of the past boom, who have been disproportionately receiving the spoils of the GDP growth.
This does not even have to mean higher tax rates. Rather, simply cutting down on the wide range of admissible deductions especially on corporate taxes and actually enforcing existing tax rates can have a huge impact.
Cracking the whip on those with massive tax arrears (a list that reads like a Who's Who of the Indian corporate class) will not just have a positive effect for the future but can also deliver massive amounts to the state exchequer immediately.
Getting rid of the excise tax incentives for particular sectors that were provided in the wake of the 2008 crisis will also provide more revenues.
And surely the time has come to end the kid glove fiscal and monetary treatment of the developers who are concentrated in luxury housing and similar elite-oriented real estate, and instead provide incentives for affordable mass housing.
The bogey that all this will adversely affect investor confidence has to be revealed for the nonsense that it is.
In many countries across the world (even small countries like Ecuador and Myanmar) recent experience has confirmed that such action may be resented by corporate groups, but it need not have any negative effects on either GDP or investment rates.
In fact, public spending that creates more employment and improves living conditions actually increases the domestic market, and therefore acts as a powerful incentive to invest even for private players.
So the recent elections in several states may even have a salutary effect on the central government if they force it to reconsider the current economic strategy.
In the medium term, such a shift is much more likely to generate truly inclusive growth that the government is so fond of talking about.
Other columns by Dr Jayati Ghosh:
World economy in 2011: Fragile and seeking miracles
Why India won't feel like celebrating this Independence Day
Global turmoil and the threats it holds for the Indian economy
The scariest thing about the world economy
Is Europe rushing headlong into economic destruction?
The finance minister has failed the common man
Two burning issues the budget must tackle
Renowned economist Jayati Ghosh is the Professor of Economics at the Jawaharlal Nehru University in New Delhi. She is also a member of the National Knowledge Commission set up by the Indian Prime Minister.