Narendra Modi's sixth budget apparently is one for all with something for all. It is natural that Budget 2019 is a thanks-giving budget for Modi's second term, rare in history, making him the third after Jawaharlal Nehru and Dr. Manmohan Singh to get re-elected after a full five-year term. Hence, this a unique occasion and opportunity to deliver.
It rained in Delhi and the Sensex crashed temporarily as the new Finance Minister Nirmala Sitharaman presented her maiden budget.
As the first budget in Narendra Modi's second term, hopes were sky high this morning. In his first innings, Modi had managed the economy well, with a lot of hype and highlights like demonetisation and GST, big gains in ease-of-doing business, controlling inflation, fixing the fiscal deficit and maintaining growth at a steady 7 percent plus. Now Modi is looking at taking the Indian economy to 5 trillion dollars, a quantum jump from the existing level of 2.7 trillion dollars. The big challenges are generating employment, fixing data on growth and economy, reducing taxes, increasing revenue and maintaining fiscal prudence. With private investment still sagging, the burden of growing the economy and creating jobs is basically on public investment.
Two mega initiatives, Ujjwala and Saubhagya, have dramatically improved the ease of living with easy access of clean cooking gas and electricity supply to the needy. Nearly 1.95 crore houses are proposed to be provided to eligible beneficiaries under the Pradhan Mantri Awas Yojana. Nearly 1.25 lakh km of roads will be upgraded under Pradhan Mantri Gram Sadak Yojana at an estimated cost of nearly Rs 80,200 crores.
The budget aims at consolidating the gains of the past five years while there is considerable stress on "Gaon, Gareeb and Kisan" and Swadeshi, the growth model advocated, has large avenues for privatisation and inviting foreign capital in almost every area.
It is estimated that railway infrastructure will need investment of Rs 50 lakh crore between 2018 and 2030. The recommendations of a high-level empowered committee of retiring power old plants and other structural reforms will also be taken up now. UDAY has also helped so far and it will get better further in the coming years. There will be multiple measures undertaken to deepen the corporate bond market; there is also a proposal to increase minimum public shareholding in companies to 35 percent from 25 percent. These are proposed by the Finance Minister stressing the need for privatisation. The government intends to work to make a platform for listing social enterprises and voluntary organisations to raise capital as equity, debt or units like mutual funds. India's FDI flows in 2018-19 was compared to global at $54.2 billion, 6 percent higher than last year. The government is examining options of opening up FDI in media, aviation and some other sectors to improve these flows further. The government is planning an annual global meet to get all three sets of global players: Industrialists, corporate leaders, corporate sovereign and venture funds. The new emphasis on Make in India was expected as in the past years it has not been a success area.
The other areas like tourism, education and culture, which were lagging behind due to lack of innovative policy initiatives and tardy execution, are now in focus. These all areas of great wealth creation and improving the country's image.
To upgrade the quality of teaching, the GIAN was started aimed to bring in the global pool of scientists and researchers. Adding such initiatives have paid off. To make India a hub of higher education, the government proposes 'Study in India' to bring in foreign students to pursue education here. The government proposes allocation of Rs 400 crores for world-class higher education institutions in the country. The government is developing 17 iconic tourism sites as world-class tourist centres to improve the flow of domestic and foreign tourists to these destinations.
IT, education, and service sectors, which were for long considered engines of growth in the post-liberalisation era, have not performed well in the past five years. The ambitious project of Bharatmala will enhance road connectivity and Sagarmala will help port and waterways connectivity - so infrastructure is back in focus. These along with other such initiatives such as UDAAN scheme will improve India's enable connectivity and bridge the rural and urban divide.
The government has made big advances in tackling the problem of non-performing assets or NPAs. The hard measures of the past three years have brought great relief. A record recovery of over Rs 4 lakh crore has been achieved over the last four years. Provision coverage ratio is at its highest in seven years and credit growth has improved to over 13%. The government has proposed to allocate Rs 70,000 crores for PSU bank recapitalisation.
The Modi government has been balancing macro-economic initiative and micro-level delivery. There are problem areas like farmer disquiet, declining manufacturing and slow growth in employment generation. However, overall, the economy performed and it was under-employment rather than unemployment that was the major issue. Kickstarting technological incentives and pushing education sector reforms, along with enhancing health-care and new world-class hospitals are bound to create a vibrant job market. The budget is comprehensive and all-encompassing in these aspects. The beauty of the new budget is that it has gone beyond fixing income and expenditure to advance ease of living. It has scores of schemes to entice the Pravasi Bharatiya which again is a focus of the Modi government.
The interim budget presented by Piyush Goyal in February 2019 had given an indication of the tax reliefs and incentives that would be offered to various segments like the middle class and farmers. The new budget has concretised and enhanced those steps.
The major beneficiaries are the salaried, middle-income group, farmers and the youth. The budget has tried to put more money in the common man's pocket. This will increase demand, help growth. Overall, a budget that means business.
(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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