T he first budget of the new decade was presented in an unparalleled challenging period, when the world is recovering from the health, economic and social impact of the Covid-19 pandemic. To this effect, this budget has ensured the right balance of ensuring the sustainable growth, social equity and long-term competitiveness of the economy.

The proposed step to create more stability in the tax regime is a welcome move. This, combined with simplification and a further improvement in the dispute resolution process will augur well for tax compliance and increase in resource mobilisation.

Further, the steps taken to increase resource mobilisation through disinvestments, the creation of an infrastructure bank and steps to improve the capitalisation of banks through the restructuring of loans will provide much-needed liquidity for investment in the infrastructure and social sectors. The funding impetus for railways, roadways and ports will go a long way in improving the competitiveness of the domestic industry by reducing the cost of logistics.

The continued support for manufacturing with the Production Linked Incentive (PLI) scheme (₹1.97-lakh crore over the next five years) will further strengthen the Atmanirbhar Bharat Abhiyan to help the country integrate more strongly with the global supply chain. At the same time, specific steps undertaken to support the MSME sector will broadbase the growth of manufacturing. The PLI scheme, coupled with duty rationalisation of inputs, especially naphtha, will bode well for value-added products and specialty chemicals. Various other steps — such as vehicle scrappage policy, electronics and textile — will spur the growth of supply chains arising out of India to serve the world markets. Also, the start of the hydrogen economy is a welcome step.

The Budget continues to support agriculture and ensures that Indian farm produce continues to serve the needs of not only Indian consumers but also the world at large. The agriculture sector is at the core of government spending. The MSP (minimum support price) commitment of 1.5x the cost of production and continued credit to the farmer of ₹16.5-lakh crore will ensure adequate liquidity and confidence amongst farmers. The focus on the Jal Jeevan mission, improving air quality, infrastructure and construction will further spur the demand for specific chemicals.

The proposed massive investment in health and wellbeing of ₹2.23-lakh crore and dedicated funds of ₹35,000 crore for Covid vaccine will increase consumer confidence and prime economic activities.

All in all, a balanced approach for resource mobilisation, stability in taxation and focussed sectoral steps to spur manufacturing growth will ensure that we come out of this pandemic stronger and more competitive.

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