The Budget was the most awaited and expected one considering the huge impact on the economy caused by the coronavirus pandemic with a projected contraction of 7.7 per cent in GDP growth in the current year.

I consider the Budget a development-oriented one aimed at reviving the economy. As expected, the Finance Minister has presented an expansionary budget of ₹34.83-lakh crore by stretching the fiscal deficit to 6.8 per cent and giving push to capital expenditure and public spending. This is much needed today.

The proposals are expected to support economic recovery and help the economy return to growth track in 2021-22 with a projected growth of 11 per cent in GDP. I welcome the 34 per cent increase in capital expenditure to ₹5.44-lakh crore, which will have a multiplier effect and accelerate the recovery process.

Health focus

Considering the Government was battling with the pandemic and saving lives and livelihoods, it has provided for a 137 per cent jump in healthcare budget to ₹2.23-lakh crore. In addition, a new healthcare scheme of ₹64,180 crore has been unveiled to strengthen our healthcare system over a period of six years.

I appreciate the Finance Minister for recognising the critical role being played by the manufacturing sector and stressing that the sector has to grow in double digits for a sustained period and make the companies an integral part of the global supply chains.

This assumes importance in the context of the Prime Minister’s Atmanirbhar Bharat (promoting a self- reliant India) and the ‘Make in India’ programme . The Budget has committed ₹1.97-lakh crore support over the next five years for performance-linked incentive scheme announced for 13 sectors.

Infra financing

The most striking feature is the thrust given to physical and financial capital and infrastructure. The Finance Minister has proposed to take concrete steps to increase funding and create a structure for long-term funding for infrastructure projects under the ambitious National Infrastructure Pipeline (NIP) programme.

NIP was launched in 2019 with 6,835 projects which has now expanded to 7,400 projects entailing a massing investment of ₹111-lakh crore over five years. Substantial funding for the projects has to be raised by the Centre and States (78 per cent together) and the balance coming from the private sector.

The Finance Minister has announced that a Bill will be introduced to set up a development financial institution and provided ₹20,000-crore capital support. She said the new DFI will have a lending portfolio of ₹5-lakh crore within three years.

I also welcome the expansion of Bharatmala road project and announcement of new national highway projects in Tamil Nadu and Kerala besides substantial additional allocation for the metro rail projects in Kochi, Chennai and Bengaluru.

The Budget has extended the tax concession for investment in affordable housing and tax holiday for affordable housing projects. A proposal for developing rental housing projects with tax concessions for the benefit of migrant labour has also been announced.

Overall, the expansionary budget, higher public spending, substantial allocation for railways, roads, metro rail projects and other infrastructure projects and tax concessions for affordable housing are expected to increase construction activity and boost the demand for cement.

(The author is VC & MD, India Cements)

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