Two big events coincided on the date which comes once in four years – the Academy Awards and India’s Union Budget. In his acceptance speech for the Oscar, Leonardo Di Caprio highlighted the significance of collective effort in handling a global challenge. Here in India, we heard another resounding speech by the Finance Minister, which underlined the government’s vision of “sabka saath sabka vikaas”.
The Union budget was clearly oriented towards inclusive development and simultaneously put in place the key enablers for fostering higher growth. The nine pillars on the edifice of which the budget intends to transform India are both focussed and laudable. These are clearly directed towards furthering the reforms process, addressing the demand concerns, creating employment opportunities, bringing in transparency and making India a progressive society.
While the vision of nation-building has already been set through the mega programmes like Make in India, Digital India, Start-Up India, Skill India and Swacch Bharat Abhiyaan, the budget has laid out the nuts and bolts to further the implementation of these initiatives. The huge thrust laid on infrastructure, including roads, highways, railways, and ports will encourage greater investments under Make in India, thereby triggering expansion of all types of economic activities. Likewise, the tax and employment incentives provided to enterprises will encourage several youth towards entrepreneurship and create many more employment opportunities.
The mantra of “minimum government maximum governance” has been re-emphasised with introduction of new initiatives for enhancing the ease of doing business. The steps announced towards reducing disputes and litigation alongside the measures to simplify and rationalise taxes displays the government’s intent to provide certainty in tax environment in the country. There is also an attempt to utilise technology across all types of public service delivery including for implementation of Direct Benefit Transfer in case of various subsidies. This will bring greater efficiency and transparency.
The focus on “Bharat” has been brought to the forefront and budget proposals will have a direct bearing on the lives and livelihood security of some of the most vulnerable sections of our society.
Social stability and inclusive development are paramount for sustainable economic growth. We cannot have a sustainable growth model in conditions of rural distress. The two consecutive years of drought had an adverse impact on India’s rural economy leading to social as well as economic consequences. This definitely called for laying certain priorities. The budget squarely addressed them by laying huge thrust on agriculture, rural development and infrastructure. Several measures towards improving agricultural production, productivity and rural incomes have been announced including creation of a Long Term Irrigation Fund under NABARD, a further push to the Soil Health Card Scheme, incentivising production of pulses, enhancing agriculture credit, implementation of a Unified Agriculture Marketing Scheme and linking MGNREGA to agriculture and creation of rural assets. All these measures will have a multiplier effect in the form of demand generation and employment creation over time.
Practically speaking, there can be no “win all” situation. Some short term pain is inevitable for some long term gain. Indian industry realises that the “Greater Good for the Greater Many” is the only long term sustainable way for a thriving nation. Therefore, the industry is well prepared to take some additional burden to provide the necessary fiscal space for some socially imperative measures announced in the budget – be it in agriculture, rural development, empowerment of women or for the upliftment of weaker sections of the society. These measures will result in a harmonious and more equitable development of India, which is equally critical for furthering Industrial growth and development.
Likewise, a healthy and happy society is integral for a nation’s progress. We see a clear reflection of this in the budget. The measures introduced for expansion of the social security net through introduction of new health protection scheme and the support extended to education via setting up of a Higher Education Financing Agency and steps towards strengthening skill infrastructure via 1,500 Multi Skill Institutes will help us reap the demographic dividend in the years to come.
Despite the additional burden on account of implementation of Pay Commission recommendation and One Rank One Pay (OROP), the Finance Minister has enhanced the developmental expenditure and yet stuck to the fiscal deficit roadmap. This is commendable and will send very positive signals to the global community. Going forward, healthy and robust fiscal management would enable widening the tax base beyond the existing taxpayers.
Several of FICCI’s suggestions have been incorporated in the Budget. It will be our constant endeavour to constructively engage with the government in taking forward the reforms process and playing an enabling role in the nation’s development agenda.
(Harshavardhan Neotia is president, FICCI)