The thrust laid on capital expenditure with an increase in outlay by over 33% to ₹10 lakh crore will enable India to continue its growth momentum and enhance resilience in the face of global headwinds. The significant public capex on transport infrastructure, including highest ever outlay for the Railways, will make industry competitive, help accelerate growth and create more jobs. In conjunction with a 66% increase in the outlay under PM Awas Yojana to ₹79,000 crore, there will be a noticeable multiplier effect across myriad sectors of the economy.
Digital infrastructure has been the backbone of New India’s success, and we see this being extended to agriculture and education in this budget. The digital public infrastructure for agriculture proposed to be built as an open source, open standard and interoperable public good is a welcome announcement, which will help address the challenges of Indian agriculture sector by ensuring better access to inputs, credit, insurance as well as market intelligence. It is fair to say that digital agri-infrastructure can pave the way for a revolution in the sector similar to what UPI has done for the financial sector.
Likewise, the proposed Centres of Excellence for AI will enable India to be future ready. I also compliment the finance minister for providing a thrust to innovation by allowing private sector to get access to select ICMR Labs for collaborative research. Further, the proposed pharma research and innovation programme through centres of excellence will also encourage more private sector led medical research in the country.
There is a clear focus inclusiveness in the budget. For instance, it lays out a roadmap for resolving challenges faced by MSMEs relating to finance and credit. The proposal to set up entity DigiLocker for MSMEs and the National Financial Information Registry are positive steps which will help remove information asymmetry, enable financial institutions to assess credit worthiness, thus facilitating efficient flow of credit to MSMEs. The infusion of ₹9,000-crore corpus under the revamped Credit Guarantee Scheme will enable additional collateral-free guaranteed credit of ₹2 lakh crore and also help bring down cost of the credit by 1%. Furthermore, by including payments to MSMEs under section 43B of the Act and allowing deduction only when it is actually made (ie. cash basis instead of accrual basis), it is expected that the scourge of delayed payments will be effectively addressed.
In addition, the budget has also laid a strong focus on the poor, vulnerable and weaker sections of the society by introducing various initiatives for their social and economic upliftment. The relief provided to the middle class by enhancing tax rebate to ₹7 lakh and revision of the tax structure both in terms of slabs as well as the surcharge rate will help boost private consumption.
There is a strong focus on sustainability, reflecting India’s firm intent to meet its net zero commitments. Provision of ₹35,000 crore for priority capital investments towards energy transition and energy security is a good step which will go a long way in achieving India’s vision for renewables and green energy. The budget proposals have covered nearly all aspects of green energy, including energy storage, energy evacuation, and financing as well as vehicle replacement.Finally, there is a continued focus on enhancing ease of doing business through measures to simplify compliances and reduce litigation. The launch of Phase-3 of the E-Courts project, proposed simplification of KYC system, one-stop solution for identity and address updation through DigiLocker, and use of PAN as the common identifier are significant steps will have considerable impact.
Overall, the FM has done a commendable job by presenting a budget which balances growth priorities with a fiscal consolidation glide path thus lending credibility to the intricate exercise. It truly sets the template for India to become the world’s next growth engine.
The author is President, Ficci and MD, IMFA