By Rashesh Shah
Union Budget 2022: The Union Budget 2022 was an eagerly anticipated event — after two long years, we were finally seeing light at the end of the Covid tunnel, growth had come back with a vengeance in the last few quarters, PLI schemes had provided a great impetus for several sectors, especially around manufacturing, and the capital markets were reflecting the positive sentiment in the economy and the hopes for the future. And the Budget didn’t disappoint!
Growth is clearly foremost in the mind of the government as reflected in the strong capex planned. An increase of 2 lakh crore, more than 35% growth over the last year spend of5.5 lakh crore, is a landmark in itself! The transition from being a historically consumption-driven nation to an investment-driven nation will play out gradually and create structural growth opportunities across multiple industries. The icing on the cake is the relatively benign fiscal deficit of 6.4% in FY23! Spending and managing deficits is a difficult balancing act, one which has tripped many a global economy. However, India is managing this with aplomb and credit is due to the government for walking this tightrope with confidence and sure-footedness.
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Driving investments is only one part of the story. India must also aspire to be a business-friendly nation, something that the current government has put a lot of emphasis on. Ease of doing business has improved materially over the last few years. The Budget announced the launch of a trust-based governance model as the second version of ease of doing business, along with ease of living through digitisation. As India looks to the ‘Amrit Kaal’, this trust-based governance could play a key role, not only in enhancing the efficiency of organisations but also individuals. Execution remains key but with a strong track record on ease of doing business, this seems like another transformational initiative which can alter the business environment in the country.
MSMEs are the backbone of the economy. However, they were severely impacted during the pandemic as many of them battled for survival. The ECLGS scheme played a key role to help these businesses tide over the disruption. The Budget initiative to extend as well as enhance the scheme is welcome, especially considering the new variants which continue to create localised disruptions. The interlinking of Udyam, e-Shram, Aseem and other such portals will also help streamline processes for MSMEs, making compliance easier and faster.
Digital is another big focus area in the Budget. Initiatives have been undertaken across education, e-passport, banking and payments, among others. India is home to some of the brightest minds in the world who have been working on path breaking technologies globally. By articulating the focus on technology, the government has indicated its willingness to be at the forefront of this global transformation. This is a key imperative for the ‘Amrit Kaal’ of the next 25 years and will lay the groundwork for building the India of future.
The Budget delivers on multiple counts – focus on growth, driving capex, especially infra, enhancing ease of doing business, supporting MSMEs, digital initiatives — all augur well for the economy. As always, executions remains the key. With the strong track record of the government, there is a deep sense of hope and optimism.
The author is chairman & CEO, Edelweiss Group