‘Budget will put economy on high growth path in the long run’

‘After all, it is a Test match, not a twenty-twenty’ was the analogy Gopal Srinivasan, Chairman and Managing Director of TVS Capital Funds Ltd, used to describe the recent Budget.

Delivering the keynote address at a seminar on Union Budget 2014, organised here by the Indo-American Chamber of Commerce, he said for all the lack of any big-bang announcements and surprises, it should be viewed more from the perspective of long-term impact and course corrections that may put the economy on a high growth trajectory in the long run.

It is judiciously focusing on and prioritising easy quick wins rather than starting with complex issues, which may actually take time and effort, and may end sapping initial energy and optimism. This government can actually afford to do that, thanks to the majority it enjoys.

“I would actually hazard going to the other extreme and calling the approach to be rather thoughtful, level-headed and pragmatic,” he said.

It is not uncommon to see new governments replace existing policies and initiatives started by earlier governments. This government, on the contrary, has embraced a lot of the policy initiatives started by the previous government, tweaked and enhanced them to align with its own philosophy.

As a case in point, he said the new Budget allocated ₹34,000 crore for the National Rural Employment Guarantee as opposed to ₹33,000 crore allotted last year — with the intention to use the policy for productive asset creation.

Pointing to the proposal to set up ₹10,000-crore fund to act as a catalyst to attract private capital by providing risk capital for MSMEs and start-up companies and initiative to frame entrepreneur-friendly legal bankruptcy protection, he lauded a whole array of changes that have been announced to catalyse MSME activity in the country, both by making financing more accessible and also by other much-needed structural changes.