The Budget had the difficult task of reigniting the economy without overstressing the government’s finances. It was a tough line to toe, and it was meticulously done, especially when we consider the challenges posed by the pandemic and the pre-Covid muted economic outlook.

The Budget has reiterated the government’s commitment to boost the demand sentiment via attractive incentives and policies whilst bolstering economic structures that took a hit due to the pandemic. It has successfully advanced the mission initiated by the stimulus packages announced last year and aims at a fiscal deficit of 6.8 per cent for FY22 without any major changes to the taxation structure.

Impact on economy

The government has announced decisive steps to boost the consumption appetite. It is well balanced and focussed on key measures, given the current context, including a clear spending focus on healthcare, vaccination and development of physical infrastructure.

The policy measures promote the creation of a robust, indigenous ecosystem of goods, services and talent. The focus on holistic development of infrastructure across the country is a particularly good move: not only will it help in bridging the divide between urban and rural areas but also drive local manufacturing, consumption and job creation across all sectors. Additionally, the Finance Minister has refrained from adding to the burden of the ordinary taxpayer and increased focus on tax consistency and transparency. This is on balance a positive.

Rural growth

Inclusive development plans for the agricultural sector, such as the plan to set up 1,000 more e-national agriculture markets (NAM), were also detailed out. This will certainly help sustain the growth momentum in rural areas, which demonstrated greater resilience than their urban counterparts during the pandemic.

By prioritising short-term spending to trigger long-term economic revival and growth, the Finance Minister has clearly generated a positive sentiment within the industrial ecosystem. With an aggressive borrowing plan and equally aggressive divestment policy, this budget is well poised to deliver sustained economic expansion. The planned reforms and proposals are well equipped to generate demand, drive consumption and sustain the growth momentum needed to revive the economy.

The critical issue of minimum wages, with its ambit expanded to include all categories of workers, too, was addressed in the Budget, which now encourages more women to take up jobs across all sectors by providing adequate safety measures.

With focussed initiatives aimed at empowering the agricultural sector, stimulating demand beyond tier-1 regions, and improving the standards of living, the Finance Minister has presented a robust roadmap for the country’s recovery. All that remains is for the public and private stakeholders to come together in a dynamic synergy and turn the Budget proposals into tangible reality at extraordinary speed and scale.

Overall, the Budget ticks most of the right boxes with an encouraging capital infusion in infrastructure that is funded through prudent borrowing, divestment and restructuring of allocations without impacting consumers negatively. Through the policy measures announced, I believe the government has, once again, underscored its commitment to strengthen the economy. We have signalled that India, while engaged in a hard fight against pandemic-led disruptions, has not lost sight of its ambitious goal of becoming a $5-trillion economy.

The writer is MD & CEO, Marico Ltd

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