By Sumant Sinha
This Budget came against the backdrop of testing times. It had to kick-start the growth engine, spur consumer demand, shore up investor sentiments and create jobs, while building resilience against future pandemics. The FM managed to meet most of India Inc’s expectations.
A massive thrust on infrastructure should have a positive multiplier effect on aggregate demand and jobs. The decision to set up a Development Finance Institution to fund execution of projects identified under the National Infrastructure Plan is well conceived. The decision to float zero coupon infrastructure debt funds will help attract FDI. The plan to expand roads, highways and ports and a record allocation for railways will boost connectivity and enhance ease of doing business.
Healthcare was the winner, with a whopping 137% increase in allocation. The decision to allocate Rs 35,000 crore for Covid-19 vaccination is reassuring while the Atmanirbhar Swasth Yojana will help ramp up healthcare infrastructure. Recognising the importance of access to safe drinking water through the Jal Jeevan Mission is another positive.
Some big-ticket disinvestments have been promised for the current fiscal year including two PSU banks and one general insurance provider, besides scheduling the LIC IPO. This can be a crucial source of revenue for the government if implementation targets are met.
Setting up an Asset Reconstruction Company to absorb accumulated bad debts will destress the banking sector. Coupled with fresh capitalisation of Rs 20,000 crore for PSU banks, this will augment lending capacity.
Rise in agri-credit, increase in outlay for development of rural infrastructure and doubling of micro irrigation fund will help enhance farmer income. Integrating 1,000 additional mandis with eNAM will enhance transparency and competitiveness.
The PLI scheme for identified champion sectors will accelerate formation of a robust manufacturing ecosystem in the country. Besides supporting self-reliance, this will have ancillary benefits in the form of more jobs and position India as an alternate manufacturing hub for the rest of the world.
For the common Indian, while the Budget does not enlist any tax exemptions, it also does not levy any new surcharges. Citizens above 75 years with only pension income have been exempted from taxes. A one-year extension of the additional tax deduction on loans taken to buy affordable houses is another benefit.
The start-up ecosystem has received several incentives such as easing norms for one-person companies, extension of tax holiday and extension of exemption on capital gains for investing in start-ups, each by one year.
The Rs 3.06 lakh crore package for revamping stressed power discoms is an important step. The decision to progressively end monopolies in the distribution sector is also commendable. Allocation of Rs 1,000 crore and Rs 1,500 crore for SECI and IREDA and the launch of National Hydrogen Mission will boost the renewable sector. Policy for voluntary scrappage of old polluting vehicles and allowance for fighting air pollution impart a “green” touch.
(Writer is the CMD of ReNew Power)