Woven around the themes of aspirational India to boost standard of living, economic development for all and building a humane and compassionate society, Budget 2020-21 laid down a coherent roadmap to boost the income and purchasing power of the people of India. Drafted on the lines of Economic Survey 2019-20, Finance Minister Nirmala Sitharaman’s aim to make businesses more innovative, healthy and solvent with the use of technology and digitisation will help boost growth, wealth creation and consumption in the economy.

Also termed as the ‘Aspirational Budget’, Budget 2020-21 focusses on lifting people out of poverty and encouraging employment.

Calling entrepreneurship the strength of India, the proposal to set up an investment clearance cell to provide end-to-end facilitation, support and clearance at the State level, the formulation of a National Logistics Policy to make MSMEs more competitive and deferring the tax burden on employees due to tax on Employee Stock Options will further help boost entrepreneurship and investments in the sector.

To attract growth capital from global investors, the government has taken various initiatives and introduced policies that would unleash the entrepreneurial spirit of citizens, in India and abroad. Some of the major reforms announced are throwing open select government securities for non-resident investors, increasing the FPI limit to 15 per cent, creation of a debt ETF, app based loan products for MSMEs, and amending the Banking Regulation Act to strengthen co-op banks.

Closer home, for the NBFC sector, reducing the loan size and limit for NBFCs to be eligible for debt recovery under SARFAESI will help NBFCs to be treated at par with banks and, thereby, help improve the rate of recoveries and NPAs. Enhancing of the partial credit guarantee scheme will further help in providing much-needed relief and ease the liquidity crunch in the sector.

Recognising that analytics, Internet of Things and AI are the change-makers of the world, the government’s proposal to build data centre parks throughout the country will provide an extra push to the ‘Digital India’ initiative. India Inc can expect more technological innovations and increase in digital delivery of services due to the impetus provided to digitisation, machine learning, and robotics.

Sitharaman’s aim to improve ‘ease of doing business’ and ‘ease of living for farmers’ will help mitigate farmers’ distress and promote rural development for economic growth. The proposal to set up rail and air services for transportation of perishable goods, and using barren land to set up solar power generation units will further support the government’s vision to create sustainable farming and income avenues for millions of farmers. Investment in agricultural infrastructure and supporting private entrepreneurships to add value to the farmer’s produce will ensure economies of scale for farmers over the years to come.

For consumers, the big bonus in the Budget has come in the form of revising the rates of personal income tax. The government’s proposed new tax regime for individuals will help increase liquidity in the hands of the common man. This will naturally help raise overall expenditure and consumption, thus giving the much-needed push to our economy.

Finally, with national security and ‘ease of living’ being the top priority of this Budget, the aim is to move towards a more holistic, content and happy economy where wealth creators and risk taking entrepreneurs would be respected. This push towards more inclusive growth with a visible increase in expenditure on social sector schemes to promote rural growth and entrepreneurship will be a good benchmark to map the success of the country in the year to come.

The writer is MD and CEO, Tata Capital

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