Paving India’s future

Under intense expectations, Finance Minister Arun Jaitley has addressed crucial areas of the economy and plans for building capacities as well as capabilities.

The pursuit of growth, aimed at double digits in the near future, puts India firmly on the path of high growth. What is praiseworthy is that this pursuit is unfettered by measures for fiscal consolidation – a sine qua non for sustainable growth.

It is heartening that the infrastructure sector initiatives, including those in the rural areas — which both spur the domestic demand and ease supply-side constraints — have been the thrust area in this Budget. An increased investment of ₹70,000 crore in 2015-16 over 2014-15 will see a boost in demand for construction materials such as steel and cement, which have witnessed subdued growth on account of sluggish global as well as domestic market conditions in recent times. Building six crore houses in rural and urban areas, setting up five ultra mega power projects and annoucing mega-scale projects for roadways, railways and ports will also provide a fillip to the economy.

Similarly, a national investment and infrastructure fund will help ease fund flow for the infrastructure sector. For the steel industry, the thrust on infrastructure as articulated in the Budget is most welcome. These measures will invigorate growth in steel consumption in the coming years.

The other major initiative we are enthused about is the ‘National Skill Mission’ — the need of the hour for both industry and the country’s youth.

‘Make in India’ has received a boost with a slew of measures aimed at improving the ease of doing business in India. Small and medium industries — major employment generators for the economy — have been aided to participate in the nation’s development in accordance with their potential. Measures such as Mudra Bank, and technology-facilitation agencies are likely to foster the entrepreneurial spirit, resulting in numerous startups.

The desire for a low and stable corporate tax regime reflected in the decrease of corporate income tax from 30 per cent to 25 per cent, will improve business sentiment and rejuvenate the corporate sector.

The issue of ease of doing business has been addressed by the introduction of measures such as procurement law, public contract dispute resolution Bill, regulatory reform law and so on. The announcement on the new bankruptcy code to replace BIFR and SICA are much-awaited reform measures.

Current priorities which include solid growth, pruning down inflation and maintaining a comfortable current account position have been addressed in a reassuring manner.

Bold measures such as improved delivery of subsidy, broadening of the tax base and expected buoyancy in tax revenue are all aimed at achieving fiscal consolidation, which is vital.

The writer is Chairman, SAIL

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