The Finance Minister should be commended for laying down a comprehensive, comprehensive and progressive budget that would provide a master plan for building a strong and healthy economy and would serve as a blueprint for India@100. The budget includes seven priorities that are meant to work together and act as the ‘Saptarishi’ to guide the nation through Amrit Kaaldriving towards a brighter future.
India made significant efforts to stimulate the post-pandemic recovery, despite a bleak external environment, geopolitical tensions and softening global demand, making it clear that growth, innovation and infrastructure will remain the main focus to ensure resilience.
Infrastructure and investment was one of the main priorities in this year’s budget. By increasing the capital investment outlay by 33% to ₹10 trillion in a row for the third time, the government has clarified its priorities. This would stimulate the investment cycle, help growth and development, and contribute to job creation. On the budgeting level of it ₹10 trillion, the Centre’s capex would be 3.3% of GDP. In addition, 50-year interest-free loans will be encouraged for the states that spend more on capex. Provision has also been made in the budget for ₹35,000 crore towards energy transition and net zero objectives.
The government has identified 100 projects for last mile and first mile connectivity for ports and other important sectors like coal, steel, fertilizer and food grains. This will encourage exports in these sectors, increase efficiency and reduce the cost of doing business. The Finance Minister also proposed 50 additional airports, heliports, water aerodromes and airstrips that will be revived to improve regional connectivity. The record outlay for rail shows that it remains an area of focus.
To improve the ease of doing business in India, more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalized. In addition, the Jan Vishwas Bill will amend 42 Central Acts which will further strengthen the confidence of the stakeholders in the government.
Lack of information on financial credentials and creditworthiness hinders lending. To overcome this, the government plans to establish a National Financial Information Registry.
To protect MSMEs from government contract failure during covid-19, the government has decided to refund 95% of the forfeited amount as a token of the huge contribution made by the small entrepreneurs.
The budget lays a strong foundation for innovation, and artificial intelligence centers of excellence are one major force. Another interesting proposition is lab-grown diamonds, an emerging sector driven by technology and innovation. With the depletion in natural diamond deposits, this is an admirable step to seize the opportunity. The customs duty on seeds used in the manufacture of lab grown diamonds has also been reduced.
The government plans to encourage domestic production of electronic vehicles, televisions, mobile phones, home appliances, and specialty steel. Custom duty on key parts was reduced to encourage domestic production of EV batteries, mobile phone components such as cameras, TV panel components, and steel for cargo to encourage domestic production, and custom duty on electric chimneys was increased to encourage domestic production. .
The budget will renew growth drivers, boost production capacity, improve infrastructure and logistics, reduce cost inefficiencies, boost exports and generate employment, amid mounting challenges of slowing global growth. It will also provide a great opportunity for India to become part of the global value chains and emerge as a global manufacturing hub.
Dr Anish Shah is senior vice president, Ficci, & MD and CEO, Mahindra & Mahindra Group.
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Updated: 02 February 2023, 12:41 AM IST
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