Growth-oriented and bold

Almost a year since the lockdown, Indian citizens and businesses see a tangible ray of hope that the worst may finally be behind us. Finance Minister, Nirmala Sitharaman, promised a once-in-a-lifetime, never seen before budget announcement – and, based on the proposals presented during thesession at the parliament, the Union Budget 2021-22 is indeed a landmark moment for the Indian economy. The Finance Minister smartly balanced budgetary expenditure with fiscal consolidation to enable achieve holistic and sustainabletransformation.

Encouraging and growth-oriented, the 2021 budget supports the achievement of the Aatmanirbhar Bharat vision and fuels post-pandemic recovery.

We foresee a revival of consumer confidence with the budget focussed on inclusive human capital development, infrastructure development, and universal healthcare. The FM announced the plan of launching a Mega Investment Textiles Parks (MITRA) scheme to attract investments and drive employment in India’s textile industry.

Setting up of 7 textile parks in the next three years in addition to the recent PLI scheme for technical textiles and manmade fibres, further promises to strengthen the global leadership of Indian Textiles Industry.

The budget also proves to be a strong enabler of women empowerment in the country, with measures that promote women working in night shifts across all sectors, with adequate safety.

The move to incentivise individual and enterprise customers with limited-time tax breaks and other financial concessions will also reap significant short-term and long-term dividends.

To begin with, the move will enable B2C and B2B consumers to realise greater value on their spending, paving way for higher demands of goods and services.

Manufacturing, in particular, will benefit from this increased consumption proclivity and will set the sector along the path of recovery. Reforms such as import duty reduction in inputs for man-made fibres from 7.5 per cent to 5 per cent is a positive step in this direction.

On the other hand, import duty on cotton has been raised from 0 to 10 per cent. Although this move will affect the industry, cotton being a very important input, the simultaneous push towards bolstering the domestic raw material landscape can mitigate any fallout by stimulating higher production within the country.

Export-to-import ratio

Heightened manufacturing activity will also improve the country’s export-to-import ratio by reducing its dependence on foreign goods and increasing its outbound contribution to the global market.

This will be in line with Mahatma Gandhi’s vision of an ‘Aatmanirbhar Bharat’ – a message that has recently been adopted by Prime Minister Modi to push India onto a path of greater self-reliance and self-sufficiency.

The Union Budget projects an optimistic and bold roadmap for economic growth. Given the disruptive challenges faced, it is a good starting point to propel the recovery, boost consumption, encourage investments and give impetus to industries.