News: Finance Minister has recently presented the budget.
Although there are many positives in the Indian economic scenario like with 9.3% India is the fastest-growing large economy, it has over $630 billion of foreign reserves equalling 13 months of imports.
However there are some challenges too like the problem of unemployment rate.
How the present budget tries to address these issues?
Infrastructure– The current budget allocates ₹7.5 lakh crore to infrastructure, which is 35% higher than previous year.
It has the benefit of triple effect that is it generates employment, revives the core sector and improves the productivity of the economy.
A large part of this allocation will be to fund the PM Gatishakti, with special emphasis on setting up 100 multimodal cargo terminals and data connectivity for seamless movement of goods. This initiative will bring tremendous benefits to “Make in India” & PLI initiatives and reduce business costs.
However, government should focus on proper implementation to harness its complete benefit.
Financial assistance to States for capital Investments has increased: This reflects the true spirit of a federal structure.
Digital India: Government initiatives like issuing digital currency, Digital University, emphasis on digital banking, auctioning 5G spectrum, building optical fibre network, etc will improve efficiency and lead to generation of employment in the services sector.
It also puts emphasis on urban planning and development, as 50% of India’s population lives in urban areas. This will improve quality of life.
What the budget still missed to address?
Healthcare did not get the expected share of allocation. This is specially important as India has one of the lowest hospital infrastructures for its population.
While there is mention of light touch regulation for AI, green energy and clean mobility, there was need for more to accelerate growth in these sunrise sectors.
The budget also misses overcoming the shortfalls of the Privatisation and asset monetisation initiatives that under delivered, and reforms were expected to ensure that those get back on track.
The other sector, one of the largest employers of blue-collared workers, i.e. the real estate sector, was missing in terms of suitable incentives, specially when it is still to recover from the pandemic
Indian Diaspora had a long-standing demand that the OCI (Overseas Citizen of India) investments be treated at par with the resident investors, Budget could have used the diaspora as an additional economic engine if it fulfilled this demand.
Source: This post is based on the article “Foundation for digital India 2.0” published in The Hindu and “Budget sets up the digital pitch for India to bat on” published in Live-Mint on 2nd Feb 2022.