Synopsis2021 is here, bringing with it a feeling of hope and optimism. India has done well to limit the spread of Covid over the last few months and swiftly launching the vaccination drive. The need of the hour was to take concrete measures to revive the economic growth engine.
2021 is here, bringing with it a feeling of hope and optimism. India has done well to limit the spread of Covid over the last few months and swiftly launching the vaccination drive. The need of the hour was to take concrete measures to revive the economic growth engine. The budget does just that in a spectacular fashion.
The FM has done a commendable job by announcing a bold and thoughtful budget that addresses the immediate need to power the economic growth engine, putting in place the building blocks for long-term growth and self-reliance by adequately funding core sectors, without overburdening the common man with new taxes or levies.
The pandemic has left us with many lessons and changed our lives in many ways. The most prominent among these is the shift to a predominantly digital way of life and an increased thrust on health and wellness. Even as India made rapid strides on the first aspect over the last few years, it lagged on the latter. While there have been some measures announced recently, more needed to be done. The budget has rightly given impetus to the healthcare sector.
At a time when private sector investment is muted and capacity utilisations low, public spending on infrastructure is the right counter-cyclical measure to boost demand and job creation. The budget allocates significant funding on this front, strengthening the important transport corridors to the far ends of the nation.
Funding is one thing, ensuring smooth implementation is another. A case in point has been ease of doing business. In a country that has more than 63 million MSMEs, ensuring seamless approvals and minimising bottlenecks while starting or conducting a business becomes an important aspect. The budget has announced several measures to make it easier for India’s entrepreneurs to gain prominence and contribute to the transformation of the economy.
Among the core sectors driving economic and inclusive development, insurance plays a critical role. By increasing the FDI limit to 74%, the budget has accepted a long-standing demand of the industry. This will provide much-needed capital, particularly to smaller or undercapitalised companies.
Even as the budget focuses on catalysing the core sectors, it does so while staying away from burdening individuals or corporates with new or higher tax rates. Battling a significantly high fiscal deficit amid a limited inflow of taxes and levies, policymakers have taken the right step to give priority to growth over fiscal prudence in the near term.
The FM deserves credit in having crafted a budget that sets its priorities right and puts its energies in the right areas. What is important now is to ensure swift implementation of the innovative measures. Having said this, as the proverb goes — “Well begun is half done”.
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