In the present situation of global economic crisis and national economic slowdown, ''inclusive'' public expenditure, such as in the NREGS, is not only desirable from a social or welfare perspective - it also provides very direct economic benefits. This is because wage employment schemes like NREGS tend to be self-targeting and thus will lead to a higher multiplier effect, making government expenditure more effective in reviving output and indirect employment.

Negating the impact of the current inflationary episode in India on the poor requires both the ensuring of appropriate supplies through imports, and a transfer of purchasing power from the profit earners to the workers. Hence, even if augmentation of supplies through resorting to imports, as the government is doing now in the case of foodgrains, succeeds in ending inflation, there is still the need to put additional purchasing power in the hands of the poor so that they regain their earlier real income. The author argues that the basic problem with the 2007-08 budget is that it is oblivious of these social demands of a situation of profit inflation.