The Finance Minister has met key expectations of industry by delivering a growth-oriented Budget that is inclusive. The Budget has struck a right balance by delivering both a short-term demand stimulus and laying emphasis on medium to long term growth imperatives, while maintaining fiscal discipline. Besides, there is continuity in policy announcements. The focus on simplification and ease of doing business, boost to manufacturing, thrust on public capex, use of technology, support to women, farmers and MSMEs, and promoting sustainability are the key themes that resonate once again in this Budget.
Employment is one of the biggest challenges faced by policymakers in India. Indian economy needs to generate nearly 78.51 lakh jobs annually in the non-farm sector to cater to the rising workforce. This Budget has attempted to address this huge challenge. Job creation is the underlying theme in most of the Budget proposals. The Prime Minister’s package for employment and skilling through five schemes, including ‘Employment Linked Incentive’ for first-timers, can be a game-changer.
The strong boost given to manufacturing as well as continuation of high capex of ₹11.11 lakh crore will also have a positive impact on job creation. Proposals for setting up working women hostels and crèches would also help enhance women’s participation in the workforce, which is much needed for ensuring sustainable and inclusive growth.
Fillip for skilling
On the skilling front, there are several initiatives including upgradation of ITIs and their curriculum to match industry requirements. The innovative scheme of internship for youth in top companies could also help address the issues related to employability and quality jobs for those who are not employed and not engaged in full time education.
The Viksit Bharat vision necessitates Indian manufacturing to take a giant leap. The country’s global share in manufacturing needs to be enhanced to 12 per cent from the current 3.1 per cent. The impetus given to manufacturing in the Budget is a huge positive. There has been continuity in measures towards ease of doing business, with simplification of taxation and ease of compliances in tax and trade. The thrust laid on research and innovation as well as focus on industrial development through plug and play infrastructure, industrial corridors and 12 industrial parks will encourage greater private investment in manufacturing.
The Finance Minister has also announced a framework for next-generation reforms, including reforms in key factors of production. While there are some policy measures to improve efficiency in land, labour, capital, power, finance and technology, the structural transformation in these areas is awaited. Hopefully, the proposed economic framework will address this challenge effectively and provide a clear roadmap for improving industry’s competitiveness.
Likewise, the comprehensive review of customs duty structure planned over the next six months is much needed to address duty inversion as well as to make Indian industry globally competitive. The Budget has also announced several measures for supporting MSMEs, by addressing the key challenge of financing and market access.
Some of the long-standing demands of the sector have been met, particularly deployment of alternative risk assessment model for bank credit, introduction of credit guarantee scheme and reduction in turnover threshold for registration on TReDS platform. The proposal to establish e-commerce export hubs will open new market avenues for MSMEs and help expand exports. These measures will provide a huge relief and support to the MSME sector and encourage it to scale-up.
In all, the Finance Minister has deftly balanced the expectations of stakeholders, putting the money where it is required while maintaining fiscal discipline.
The writer is President, FICCI