The Finance Minister has done a credible job by once again laying down a balanced, progressive budget which accords primacy to growth. This will not only ensure India’s resilience to imminent global challenges, but also strengthen India’s foundations for future growth. The Budget proposals further strengthen the fundamental pillars and will ensure resilience, inclusivity and sustainability. It carries forward the reform agenda of the government and puts in motion an action plan for Amrit Kaal. We see a clear commitment towards ensuring manufacturing competitiveness, ease of doing business, and supporting livelihoods across sections.
The push given to public capex will ensure that growth momentum seen by the Indian economy continues and we remain the fastest growing economy in the world. The revision in tax rates under the new regime, including the enhancement of tax rebates will give a strong boost to consumption.
The MSMEs are in for a relief with some of the key announcements made by the FM. The revamped credit guarantee scheme for MSMEs will benefit from an infusion of ₹9,000 crore enabling credit flow of ₹2-lakh crore with a 1 per cent lower cost. In addition, the creation of National Financial Information Registry repository and move from an accrual-based payment system to a cash-based one will ensure MSMEs don’t suffer as a result of delayed payments.
Emphasis on green growth
There has been a huge emphasis on green growth and sustainability in the Budget across sectors such as green energy, green farming, green building and green equipment. The inter-State transmission system for evacuation and grid integration with investment of ₹20,700 crore along with the outlay on green hydrogen will help India achieve its commitment towards NDC targets. The National Hydrogen Energy Mission that was launched before the Budget will also give a boost to this sunrise sector. The capital investments allocation of ₹35,000 crore towards energy transition, as well as the green credit programme are another positive step towards sustainable growth. All these measures will ensure that many new businesses get created in the green space, proliferating creation of large number of green jobs.
Agriculture remains an important part of India’s economy and has been given due attention. The announcement of Agriculture Accelerator Fund to encourage agri start-ups by young entrepreneurs in rural areas is welcome, while promoting cooperative-based economic development model for farmers is a practical move. The plan to set up a decentralised storage capacity is encouraging for farmers as it is likely to lead to better price realisations. The enhancement of agriculture credit target and the cluster-based and value chain approach through public private partnerships (PPP) for enhancing productivity of cotton crop are also welcome steps.
The government’s commitment to ensuring excellence in skill development of our youth through a focus on industry-ready training is noteworthy. Similarly, a focus on digitisation, building centres of excellence for Artificial Intelligence with a participative role of the private industry, further enablement of public digital infrastructure especially for agriculture, Entity Digi Locker for MSMEs, Unified Skill India digital platform and National Data governance policy will all serve to take the reform blueprint of the country a notch higher.
Innovation ecosystem
The Budget also lays a strong thrust on innovation by allowing the private sector to get access in select ICMR Labs for collaborative research. The proposed pharma research and innovation programme through centres of excellence is also a positive step and will also encourage more private sector medical research in the country. These measures will propel the overall innovation ecosystem in the country.
It is heartening to see that the Budget proposes to accelerate trust-based governance. We see further measures towards improved governance and strong consultative mechanism with industry and citizens. There is a focus on improving bank governance, enhancing investors’ protection, reducing response time, and facilitating effective regulations in the financial sector. The proposed system of Unified Filing Process with different government agencies will improve the ease of doing business.
Overall, the Budget has infused optimism and lifted our spirits. The FM must be complimented for walking a tightrope and maintain the deft balance of revenues and expenses without compromising on the growth aspirations of the economy and yet remaining committed to the glide path towards fiscal consolidation.
The author is Immediate Past-President, FICCI, CEO and MD, HUL