Economy and GoI bodies adopting digital, including for the budget, will be emulated by other nations.
Riding on high expectations, and in the backdrop of the Covid-19 pandemic, GoI’s direction of the Indian economy as presented in the budget is balanced, pragmatic and bold. The third budget in the history of India to be presented following a contraction should rejuvenate the growth trajectory. Finance minister Nirmala Sitharaman has firmly laid down a comprehensive plan to put India back on the recovery path while managing aspirations of its billion-plus citizens.
Following the Aatmanirbhar Bharat policy in spirit and action, measures taken by GoI, with total packages amounting to Rs 27.1 lakh crore, have now laid the foundations of self-reliance, accelerating our pace of reforms and cushioning the impact of the unprecedented crisis.
The six pillars of the budget — health and well-being, infrastructure, inclusive development, human capital, innovation and R&D, and maximum governance — coupled with a renewed thrust to the productionlinked incentive (PLI) scheme, will give a big push to manufacturing to grow on a sustained basis and become an integral part of the global value chains.
As reiterated in the Economic Survey 2020-21’s focus on accessibility, affordability and accountability of India’s healthcare system, the budget rightly made a strong pitch for a huge increase of 137% y-o-y in allocation towards healthcare, with sizeable allocations towards the Covid vaccination drive. This would help in addressing the gap in healthcare accessibility for better delivery.
A significant announcement made for reinvigorating infrastructure development is the increase in funding to the National Infrastructure Pipeline (NIP) by creating institutional structures, monetising assets and enhancing the share of capital expenditure in central and state budgets. This will go a long way in providing state-of-the-art infrastructure development, which will support the growth of industry and create jobs.
With the revision of the fiscal deficit to 9.5% of GDP for 2020-21, and a projection of 6.8% of GDP for 2021-22, the path of fiscal consolidation is certainly disrupted in the short term. But that should not be a major worry. Faster-than-expected normalisation of economic activities will boost tax revenues and, hopefully, the spending is expected to rationalise over time.
New and progressive reforms such as increase in FDI limit to 74% in the insurance sector, incentivising the incorporation of one-person companies, strengthening of National Company Law Tribunal (NCLT) frameworks, implementation of e-courts, introduction of alternate methods of debt resolution, special framework for MSMEs and, most importantly, doubling of allocation to support MSMEs would promote ease of doing business.
But the biggest takeaway of the budget was that the economy and the government bodies have adopted digital in a big way — this budget presentation being the first digital budget to be presented by GoI. Finance minister Nirmala Sitharaman’s thrust on enhancing digital payments with financial incentives, and special allocation to move towards a digital census, is likely to be emulated by many other countries. This year’s budget was awaited with much eagerness and it clearly reflects optimism and confidence. It reflects GoI’s strong intent of refuelling growth in the economy. The renewed focus on health and infrastructure augurs well for spelling the government’s growth agenda and a march towards building a New India.
Sunil Bharti Mittal is founder and chairman of Bharti Enterprises.