By Brij Mohan Sharma
In her fifth Budget, Finance Minister Nirmala Sitharaman has rightly placed the right emphasis on the right areas at the right time. Breaking away from the tradition of taking the path of populism in a last full Budget before the country heads to a general election, the FM has remarkably taken the road of marco-economic stability and a sustained growth, eschewing populism. The Budget will go down in the annals of history alone for this sheer courage and confidence shown by the FM and her party led by Prime Minister Narendra Modi.
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The forward-looking Budget has touched every critical aspect of a durable, long-term pathway of development for the country. Both short-term and long-term. Thrust has been laid on both demand-side and supply-side growth. While increased capital expenditure, for the third consecutive year, it fuels the demand-side growth and job creation; the supply-side growth is a certainty, spurred by more money in the hands of the taxpayers, the MSMEs to invest more and the farmers through enhanced agricultural credit.
However, though aimed at ensuring a sustained green growth, the Budget has not lost its way of fiscal prudence. The FM has struck a great balance between prioritising growth and fiscal prudence. Gross market borrowing has been kept lower than expected. Fiscal deficit has been budgeted at 5.9% of the GDP for the next fiscal and has been kept unchanged at 6.4% for the current fiscal. Pegged at 11.7% growth for the next fiscal, tax receipt estimates are more realistic.
All these show the government’s confidence of steering the country to yet another year of sustained growth from an estimated 7% expansion in the current year, touted to be the highest among all major economies. Despite the global economy facing headwinds in galore, led by the pandemic and the Russia-Ukraine war, the Budget proposals to ensure an investment-led growth would guide the country’s journey during the Amrit Kaal.
India @100 is to be driven by green initiatives and rightly so, the government has committed to net zero emission by 2070. Far from jettisoning the goal at the altar of growth and populism, the Budget has placed ‘green growth’ as one of the ‘Saptarishis’ guiding the country through the Amrit Kaal. As the FM puts in her Budget speech, the country is already implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and policies for efficient use of energy across various economic sectors, with the aim of reducing carbon intensity of the economy and providing for large-scale green job opportunities.
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Built on the focus of green growth, the Budget with a dedicated corpus of Rs 35,000 crore will drive India’s progress towards green energy transition, needed to reduce reliance on crude oil imports. The proposal to construct an inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh with an investment of Rs 20,700 crore including central support of Rs 8,300 crore and the target to produce 5 MMT green hydrogen by 2030 would propel the country’s journey towards a net zero economy.
The proposed green credit programme has the potential to incentivize environmentally sustainable and responsive actions by companies, individuals and local bodies, and help mobilize additional resources for such activities. The Rs 10,000 crore GOBARdhan scheme will promote circular economy. Allocation of funds to replace old vehicles of the central government is also commendable.
The proposal to promote local lithium cell manufacturing to further provide impetus to green mobility is equally praiseworthy. Paying heed to the industry, the FM has rightly extended customs duty exemption on imports of capital goods and machinery required for the manufacturing of lithium-ion cells for batteries used in electric vehicles. Commendable.
The Budget has proposed to adopt a cluster-based and value chain approach through Public Private Partnerships (PPP) to enhance the productivity of extra-long staple cotton. The FM said this would mean collaboration between farmers, state and industries for input supplies, extension services, and market linkages. However, the Budget would do well to remove import duty on cotton.
A Budget for a country like India at this juncture is almost a futile exercise unless it does not take measures to reap the benefits of its demographic dividend. India has all the ingredients to become the manufacturing hub of the world. It, however, needs millions of skilled and trained manpower who can be the torchbearers of India’s progress on this front. There has been a lot of progress. The Budget proposal of launching the Pradhan Mantri Kaushal Vikas Yojana 4.0 to skill lakhs of youth is a step in the right direction. The plan aims to promote tourism, set up 100 labs for developing applications using 5G services are all aimed at creating employment opportunities.
All in all, it’s a Budget that marks the journey of a Nation aspiring to become a developed economy. Thank you, the Hon’ble Finance Minister!
The author is Joint Managing Director, RSWM Ltd., LNJ Bhilwara Group.
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