Budget 2018: In the run-up to budget day, it was amply clear that this would be a challenging budget for the FM. The Indian economy is just beginning to recover from the structural reforms of the past two years, but with inflation climbing as well, the clamour for relief from the middle class and businesses was shriller than usual. Still, the FM has in the end delivered a fiscally prudent budget that juggled various priorities while at the same time setting up the foundation for critical pillars of future growth. The budgetary allocation of Rs 1 lakh crore to upgrade India’s education sector is one such high-impact step. The spread of internet, mobile communication and digital technologies is ubiquitous around us and for India to maintain its knowledge-edge, our classrooms must be future-ready. The FM’s proposal to convert blackboards to digital boards in schools by 2022 is indeed commendable. The universal health protection scheme for 40% of the population is a major step.
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The other noteworthy proposal in this Budget was the renewed focus on infrastructure development. The record spending to build 35,000 kms of roads under the Bharatmala project, the boost to urban railways connectivity in Mumbai and Bengaluru, and increasing our airport capacity will prove to be major growth boosters. The 100% increase in allocations for the government’s Digital India scheme will go a long way in increasing internet penetration to rural areas and transforming India into a less-cash economy. Already, one lakh gram panchayats, out of 1.5 lakhs announced last year, are connected with broadband ensuring internet access in villages.
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But, perhaps the most important information nugget to come out of the Budget was the announcement that India would frame its own state policy to encourage new-age tech such as AI, machine learning and big data sciences. The mention of ML, AI in the FM’s speech is recognition that the government realises the immense potential these technologies have in transforming the way society and businesses operate. China and the UK already have government policies that encourage work in the fields of AI and ML, so it is heartening to see India move forward in this space as well. This budget also aims to promote demand, while catering to the rural economy and nudging the country further towards the path of digitisation. The increase in farm and social sector spending and lowering the corporate tax rate for all MSMEs to 25% provide a much needed shot in the arm for ailing sections of the economy. It encourages businesses to invest their surplus income in expanding capacity and generating new employment.
There are however a few areas this budget misses out on. There was no mention of improving the country’s ageing telecom infrastructure, which is critical to the government’s digitisation drive. Also, the lack of policy focus in fostering a conducive business environment for our homegrown internet-based companies could stifle the culture of innovation that currently exists.