Nirmala Sitharaman's Budget Rises Admirably To Meet Challenges

The Modi government's seventh budget presented by Finance Minister Nirmala Sitharaman is a peppy, happy-go-lucky reformist budget focusing on the common man, agriculture, health and education.

It is unique in many ways and marks a clear departure from the previous ones piloted by the late Arun Jaitley. Even the last budget for 2019-20 was essentially a product of Jaitley's thinking, though he had vacated the post for the new FM.

The new budget has addressed most concerns of the tax payer by ensuring easier compliance and less interfacing with the taxman. It has incentivized investment, both local and global. It takes care of the core political constituency of the ruling party and over all, it is a growth-oriented, people-friendly budget.

The potential growth areas have all been tapped. Big spending on infrastructure, specially on 100 airports, railways; power sector reform; focus on highways, tourism, higher education, digitization, district-level medical colleges and big exemptions to SMEs and start-ups with an emphasis on jobs in agriculture, horticulture and doubling milk and fish production aim at creating employment and accelerate growth. The growth projected for 2020-21 is ambitious but the budget has in many ways instilled possibilities of economic revival.

India under Modi has moved up in the ease-of-doing-business to 68 rank from 148 in 2014. Emphasis now is on ease-of-living. Considering the growth slowdown and the economic crisis looming large, Nirmala Sitharaman has done an excellent job on reviving hopes and buoying the sentiment.

The revival of faith of the taxpayer and investor seemed the running theme of the longest-ever budget speech. Interestingly, there was a simplicity about the speech to make it connect.

Modi has since 2014 been trying to make stable the rural economy and his Kisan Samman Yojana of giving Rs 6,000 to every farmer and a bonus to farmer produce have ignited hopes. Agriculture growth last year was a record high of over 3.5 percent. The new budget is being seen as sufficiently farmer-friendly. The corporate world has also been pampered with tax cuts, incentives to export promotion, freedom from tax inspectors, rewarding of wealth creators, tax holidays and ease of getting FDI funding. The common man will get a tax benefit of Rs 78,000 rupees per annum at the lowest level of the tax bracket. With India as the fifth-largest economy," and possessing the largest youth work force in the world, the daunting task of generating employment and ensuring growth are inter-related, Sitharaman has done a convincing job. The specific stress on investment in education, railways, culture and creation of direct recruitment chain up to the district level are bound to pep up young spirits.

The earlier budgets of Modi government focused on controlling corruption, money supply, rural growth, targeted welfare schemes, infrastructure building and redistribution of wealth. The new focus is on reclaiming growth, capital spending, job creation and retrieving the India growth story. The World Economic Forum only last week observed that India was pulling down world economic growth. This was both an admission of India's importance and the challenge the country is facing. The Modi government's own policies are haunting it and forcing it to undertake midway correctives. The GST and demonetization have created some heart burn. Sitharaman has promised more tax reforms at the GST task-force level. She said the indirect tax burden for households have substantially come down because of GST.

Growth essentially is all about capital. The efforts to fight corruption, black money and inflation all constrained money supply, investment and disclosure, badly affecting job creation and growth. Liquidity has become a major causality and the restrictions on free transaction of money have pulled down investment at the small and medium level, and in housing, and have restricted growth in an economy already shrunk by the worldwide recession of the last few years. India was the solitary silver line of growth for almost five years when the world economy was receding.

Prime Minister Narendra Modi has set a target of a five trillion-dollar economy. It is possible if the budget is able to unleash the animal spirit of the Indian entrepreneur by releasing liquidity, helping market forces to increase demand and restoring investor confidence. The expected tax concessions have mostly been announced and is bound to put more money in people's pockets.

Disinvestment is another vital plank of the new budget. Accelerating industrial production, doubling farm income and ensuring triple growth in job creation are the priorities set for 2020. Health has been correctly identified as an area of growth and welfare. It gives both hope and employment. The Ayushman Bharat scheme is a great hit with the poor. So are the schemes of housing for all and rural sanitation. Solar energy and free cooking gas are other welfare incentives for farmer and poor. These are Modi's flagship programmes for rural empowerment. The mega-push of women empowerment, nutrition and education could benefit the BJP politically.

(Dr R. Balashankar is Member, BJP Central Committee on Training, and Committee on Publications and former Convener BJP National Intellectual Cell and former Editor Organiser.)

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