For India to be the global manufacturing hub, we need policies that enable ease of doing business, a thrust on research and innovation, and a sharp focus on skilling. The budget proposals have touched the right levers in this direction. The measures towardsplug-and-play-led industrial development, operationalisation of Anusandhan National Research Fund, development of industrial corridors and 12 industrial parks are welcome initiatives.
The budget addresses the key pain points of MSMEs (micro, small and medium enterprises) related to financing and market access. Significant financial support has been given to MSMEs through the credit guarantee scheme, deployment of an alternate risk assessment model for bank credit, enhancement of MUDRA loan limits, as well as reduction in turnover threshold under TReDS (trade receivables discounting system) platform. The proposal to establish ecommerce export hubs will open new market avenues for MSMEs and help expand exports.
The commitment to introduce factor market reforms in areas of land, labour and finance through cooperative federalism and incentives to states sends a strong signal of the government’s commitment to strengthen competitiveness of Indian manufacturing. The customs duty rationalisation on several products and the announcement of a comprehensive review of customs duty structure over the next six months are also in line with achieving the vision of ‘Atmanirbhar Bharat’.The strong boost given to manufacturing as well as continuation of high capex of ₹11.11 lakh crore in this budget will have a positive implication on investment and job creation. These have been supplemented by employment-linked incentives focused on creating immediate employment. The attractive dispensation provided to first-time employees in formal sectors as well as manufacturing through reimbursements of EPFO (Employees’ Provident Fund Organisation) contribution is innovative and expected to yield positive outcomes.Proposals for setting up working women hostels and creches would also help enhance women’s participation in the workforce, which is much needed for ensuring sustainable and inclusive growth.The proposed model of 12-month internship in top companies, with government supporting part of the training cost, would help bring real-life skills to the youth entering the workforce. In all, the ₹2-lakh crore PM’s package for five employment and skilling schemes over the five-year period, and ₹1.48 lakh crore allocation for education, employment and skilling for 2024-25 are a huge positive.
The proposal to review agricultural research for raising productivity and climate resilience, as well as the Atmanirbharta’ strategy for pulses and oilseeds are extremely important given the rise in farm vagaries in recent years and its deep impact on food security and food inflation. The strengthening of the farm value chain by setting up large-scale clusters for vegetable production closer to major consumption centres is also a welcome initiative. Measures like these are crucial to reduce food wastage, which is currently as high as 40%.
There is continuity in simplification and digitisation of tax regimes. The abolishment of angel tax and steps to bring down litigation will enhance ‘ease of doing business’.