The first budget of Amrit Kaal has its heart in the right place

It is the sign of a maturing economy and a visionary political leadership that the Union Budget can simultaneously think strategically for the long-term well-being of the country as well as the short-term aspirations of different sections of its society. Finance minister Nirmala Sitharaman’s fifth budget is a continued reflection of the unique leadership abilities of Prime Minister Narendra Modi who has steered the economy steadily through the covid pandemic and the war in Ukraine to emerge as the shining star of the global economy. As the world looks to India as the next manufacturing hub as an alternative to China, this budget is a step in the right direction.

The immediate task before the PM and FM is to ensure that the economic recovery sustains, not just for the next year or two but the next decade and more. The budget has done the right things in that context. First, the government has increased its capital expenditure by 33% which will build crucial infrastructure, create jobs, bring in private investment and deliver a multiplier effect in terms of growth. Second, it has given relief to the middle class via a rationalization of the income tax slabs. Those at lower levels of income will be the biggest beneficiaries. They are also likely to spend their additional income which will provide a big boost to growth and jobs. Third, the lifeline of our economy, MSMEs have got due attention with a revamped credit guarantee scheme that will allow more collateral-free loans and reduce the cost of capital as well.

Fourth, the government has stuck to its fiscal consolidation path projecting a 5.9% of GDP target for next year after meeting the 6.4% target for the current year. This is a positive signal to investors as India maintains macroeconomic stability while the world grapples with challenges on growth and inflation.

The focus on key emerging sectors must be complimented. Two areas stand out: the emphasis on the digital economy and the green economy. In the former, the aspiration to Make AI in India and Make AI work for India are laudable. The setting up of three centres of excellence for Artificial Intelligence in premier educational institutions with industry as partners is a game-changing initiative.

I am also excited about the proposed National Digital Library for children and adolescents, which will make available quality books in different genres and languages.

The government’s commitment to energy transition and the green economy is well known. Changes in the indirect taxes/duties structure to facilitate a quicker transition, particularly in electric vehicles, is a very positive move.

The continued emphasis on the recently launched National Green Hydrogen Mission could make India a world leader in this space. It is good to see that the government is combining its commitment to address climate change with an effort to make doing business easier and more attractive in associated technologies.

Perhaps the most exciting part of the budget for me was the outlining of opportunities to unlock in our journey to Amrit Kaal India@100. Right on top is the empowerment of women, the key to our progress along with the empowerment of youth. The decision to help women scale up self help groups to producer organisations will promote entrepreneurship and raise the income of women in our rural areas. The second is the focus on artisans and craftspeople. If we link them to global markets and give them access to latest technologies, as envisaged by the budget, huge economic opportunities will come to this very deserving section of society.

The third area of opportunity is tourism. It is my firm belief that several regions of India can build a thriving and self-sufficient economy with jobs and livelihood just through tourism.

Overall, the budget provides plenty of reason to be optimistic about India’s future. The government has the right priorities. And at a high level, it remains focused on ease of doing business for entrepreneurs and ease of living for its citizens. The first budget of Amrit Kaal is a journey well begun.

Anil Agarwal is chairman of Vedanta Resources.