BackBudget for FY23 is neither populist nor sensational
A big theme in this year’s budget has been the futuristic mindset
PremiumThe Budget for FY23 is neither sensational nor populist, something that many thought the finance minister will do to address the imperatives of polls in five states in less than two weeks. There is little doubt that the budget underscores themes of growth through large capex, thrust on digital, boosting manufacturing and reviving micro, small and medium enterprises. It was a short budget speech but robust on content and scope.
The government has earmarked a capital expenditure of ₹7.5 trillion for undertaking the massive infrastructure development, including construction of 25,000 km of roads, putting in place a strong multimodal logistic substructure, beefing up digitization and boosting an indigenous manufacturing base. Clearly, the FM is banking on growth, and hoping higher public investment will complement private investment, to create a virtuous cycle of growth and jobs. The incentive scheme for manufacturing will also go a long way in fulfilling PM Narendra Modi’s vision.
The additional allocation of ₹19,500 crore for the production-linked incentive scheme for solar photo voltaic modules underscores the continuing focus of the government to promote green energy. This will boost manufacturing of solar power equipment, benefit solar power generation and create downstream demand for power transmission and distribution equipment. The government’s plan to unveil a battery swapping policy and set standards for interoperability is also aligned with its plan to transition towards electric vehicles (EV). The battery range of EVs and charging anxiety has been a hindrance in EV adoption and this aims to addressing that issue. Urban space constraint has posed a problem in setting up charging stations and swapping of batteries is an alternative solution.
Clearly this budget lays substantial emphasis on progressively improving ease of doing business and reforming the tax processes. It is heartening to see that there is greater trust on the taxpayer as a partner in progress. The relief through export incentives and credit benefits to MSMEs will go a long way in providing a conducive environment for them to flourish.
Needless to say, there are challenges in raising the finances that will be required. FM Sitharaman has talked about adopting innovative ways of raising this corpus though she has not enunciated it in entirety. The good news is that tax collections, especially GST, has gone up to record levels indicating a return of robustness in the economy. Besides, the government has plans to raise 1.75 trillion through monetization of public sector assets, which has kickstarted with the sale of Air India and Neelachal Ispat Nigam. The other means for the government to mobilise funds will be through the 5G spectrum sale which is also slated to be initiated in the current financial year.
The other big theme in this year’s budget has been the futuristic mindset. It is all pervasive, cutting across sectors and could be the game-changer in years to come. It is hearting to see chronic challenges such as agriculture productivity being looked through the new lenses of agri-tech, drones and organic farming. Digital in education will help reach closer to the masses and improve skilling and curriculum development benefitting large sections of people.
Tech in health care has been gaining traction and the focus on creating a formal ecosystem is another step that makes India future-ready. The acknowledgment of importance of mental health and setting up an infrastructure is something that signals to me that we are truly moving ahead. Announcements on the digital currency and bringing crypto currencies into the tax net signal the desire of the government to allow the participation of the emerging blockchain technologies in the overall economic scenario.
India has come a long way. We tend to forget that we are a nation of almost 1.4 billion people, where a vast majority till the recent past struggled for even basics such as housing, water and sanitation. But desh aage badh raha hai (the nation is moving ahead). Today, sitting in India if I can aspire of creating unicorns, access the global metaverse or buy an electric car with digital rupee, I can’t help but think that this is the dawn of a new era in the life of our country and with that, a new hope.
Harsh Goenka RPG Group chairman
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