India Budget 2019-20: With a challenging yet achievable target of making India a $5 trillion economy by 2024, both short term and long term priorities have been charted out for the Union and the State Governments.
- Anshu Budhraja
India Budget 2019: After winning the fiercely contested Lok Sabha Elections, the Indian Government has clearly set the agenda for the country’s economy. With a challenging yet achievable target of making India a $5 trillion economy by 2024, both short term and long term priorities have been charted out for the Union and the State Governments. The priorities, which include jobs creation, poverty alleviation, doubling farmers’ income, among many other issues, hold even more significance. Through this year’s budget, the government has set a progressive tone for the Indian GDP that is on the road to approach three trillion dollars this year.
Driving Digital India
We are pleased with the Government’s push for a digital economy. Proposing a host of enhancements to the digital payments system including waiving the charges on digital payments which will significantly foster a cashless economy.
The Budget also acknowledged the vital role of digital technology in India’s evolution as a major global economy. It presented a comprehensive blueprint to bridge the urban-rural divide in terms of internet connectivity and usher the next wave of inclusive growth and development.
Focus on Entrepreneurship and Skilling
The Government of India is already focusing on giving a fillip to the employment scenario and skilling youth in the country by setting up two new cabinet committees on job creation and investment under the direct supervision of the Hon’ble Prime Minister. On the back of multiple initiatives to drive entrepreneurship and self-employment, the Budget 2019 has brought jobs and entrepreneurship oriented growth measures.
The increased focus on skills to train around 10 million youth for jobs overseas in areas such as language training, AI, big data, among others will greatly augment employability efforts. It is a great step towards raising their capabilities and realizing their hopes for earning a livelihood according to their potential. One of the major components to add stimulus to the slowing economy is to create jobs. Fostering employment will lead to higher spending power which, in turn, will drive consumption and investments leading to a higher GDP.
It is also heartening to see the Government’s sustained focus on women empowerment. Recognizing the pivotal role of women in India’s growth story, the plan of expanding self-help groups (SHG) to all districts and providing Rs 1 lakh to one eligible woman in every SHG is laudable. We strongly believe that emerging industries such as direct selling can play a crucial role in fueling economic growth and in creating job opportunities.
With unemployment reaching a 45 year high in India, one of Smt. Nirmala Sitharaman’s main goal was to increase employment, and the measures announced in the Union Budget are well focused on inclusive and sustainable development to provide an impetus to entrepreneurship, skilling and job creation as well as infrastructure and MSMEs.
Focus on MSMEs
MSMEs, the second largest employment generator, are truly the growth engine of the Indian economy. To provide further impetus to the industry, the Government’s proposal of easy access to loans of up to Rs 1 crore within 59 minutes is a welcome move. Setting up of a dedicated payment platform to simplify the payment process will give a boost to the sector and bring it under the fold of the formal economy. These measures along with digitization will surely help the MSMEs become a bigger force to reckon with.
Reduction in corporate tax
In line with competitive economies, reduction of corporate tax was one of the most important expectations of the corporate sector from the budget. While the reduction of corporate tax from 30% to 25% for companies with annual turnover up to Rs 400 crores will stimulate the growth of the corporate sector, we were looking forward to a full-scale tax reduction for all organizations which would lead to more spends towards employee training and development along with more investment in research and development.
Measures for Water Conservation
Amid the water distress in some parts of the country, the budget was expected to have a slew of measures to tackle this time critical issue. Given that India contributes to over 17% of the world’s population but accounts for only 4% of the water resources, it is crucial for us to not only conserve water but also regulate the usage. It is heartening to see access to safe drinking water as a priority sector for the Government. Focused efforts towards creation of local infrastructure such as rain water harvesting mechanisms will not only ensure sustainable practices but also lead to social entrepreneurship.
The strong focus on making FDIs more attractive and easing existing FDI norms is a positive step and exemplifies the Government’s efforts to encourage numerous sectors and businesses in the country. Transformational reforms such as One Nation, One Grid to ensure nationwide connectivity will open up possibilities for the consumer sectors to reach larger masses more effectively and economically.
We laud the relentless focus of the Government on inclusive socio-economic development. The Union Budget 2019 has presented a slew of measures to propel the growth and instill confidence to realize our collective aspiration of making India the third-largest economy by 2030. Overall, focus on MSMEs, development of infrastructure, proposal for affordable housing and women empowerment would go a long way to promote all-inclusive development of the economy.
- Anshu Budhraja is CEO, Amway India. Views are the author’s own.