The Union Budget for 2022-23 was presented at a time when the global and domestic economic conditions were facing several headwinds. The covid-19 pandemic continues to challenge us with the third wave spreading through the country at a quick pace. Oil prices are rising making the already difficult inflation situation more complex.

Global central banks are indicating a withdrawal of the easy monetary policy with the Fed likely to be more hawkish in its stance. In addition to these, the demand situation in the economy continues to remain less than optimal with consequent pull back of fresh investments by the private sector.

In the above backdrop, what was needed was a booster shot that would not only support the nascent recovery but also offer relief to the stressed segments of the economy while carrying out the long- term reforms agenda so that we are on track to meet the ambitious $5 trillion goal. The Finance Minister presented a budget in a well calibrated manner offering solutions and measures that address each of these requirements. 

Big push

On the growth front, we needed a big push on the government expenditure side. The heavy dose of capital expenditure outlined in the budget provides for the same. This is going to provide a fillip to the core sectors, induce demand, generate jobs and lead to higher incomes, which in turn will fuel demand — the virtuous cycle that the economy needs right now. The fact that the Finance Minister was not hemmed in by the tenets of fiscal conservatism is indeed praiseworthy and underlines the fact that this government is willing to take bold measures that are in the best interest of the economy.

Even as we prepare for the next phase of our growth led by the ambitious infrastructure development agenda, it was equally important to provide succour to the stressed sectors. The plight of the MSME sector, which got pounded by the subsequent waves of the pandemic, is well known. Likewise, the contact-based service industries will require a much longer time before they see a return to normalcy. FICCI had requested the government to consider offering support to these segments and we are happy to note that the ECLGS scheme has been extended by one more year with an additional ₹50,000 crore being earmarked for the hospitality sector.

The Finance Minister has also carried on with the reform agenda. Besides the clear thrust on infrastructure, the replacement of SEZ Act with new legislation is a step in the right direction. It will give a huge impetus to the exports, which have proved to be a key engine of growth for the economy. The budget also lays out a comprehensive roadmap towards the enhanced ease of doing business and ease of living. The contours of EODB 2.0 reflect the spirit of co-operative federalism, effective governance and strong consultative mechanism with businesses and citizens.

The budget also focussed squarely on the issue of sustainability. Following the Prime Minister’s announcement of making India net-zero by 2070, we are happy to see several measures being announced to enable this transition. With a huge thrust on renewables, initiatives like a battery swapping policy and issuance of sovereign green bonds, the budget takes us a step forward towards decarbonising the economy. 

Overall, the Union Budget 2022-23 has put in place the building blocks for the country’s long term sustainable development.

The author is MD & CEO, Mahindra Group and Vice-President, FICCI