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Nation on Course of a Robust Economic Revival
The Budget certainly covers an extra mile in carrying forward the momentum on the policy front, aligned to the vision of ‘Atma Nirbharta’
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In the run up to The Budget, the government had many options and choices. Many awaited the Budget with hope and optimism. During and post the budget speech, it was clear that right choices were made, and hope justified. The government has through the Union Budget 2021-22 signalled its commitment to reforms and growth. The Budget certainly covers an extra mile in carrying forward the momentum on the policy front, which remains aligned to the vision of achieving ‘Atma Nirbharta’ with ‘Atma-Vishwas’. FICCI lauds this approach and the fact that the government is ready to do what it takes by not shying away from difficult reforms.
Reviving growth remains a priority and to this end the government has made a sincere effort towards bridging the existing gaps and strengthening the foundation. While infrastructure development has been a priority for the government since the very beginning, what has been a major roadblock is raising sufficient capital for the same. Through announcements such as simplification in REITS and InVITS, setting up of a Development Finance Institution, increased FDI cap in the insurance sector, creation of a new special purpose Asset Reconstruction and Management Company (AMC), the government has opened the tap of financing from both domestic and external sources, as also opportunity for foreign and domestic investors.
Moreover, the clear-cut restructuring of expenditure in favour of capital expenditure is well taken. The attempt to improve the quality of expenditure is of much significance. FICCI has been strongly advocating the need to prioritise growth over fiscal considerations and the need to leverage the multiplier impact of capital expenditure, especially in the infrastructure sector. The seriousness and strategic approach of the government to disinvestment is commendable.
With these announcements and the many past reforms working themselves through the economy, we are undoubtedly on the course of a robust economic revival. In addition, we are happy to note that the government remains committed to knitting a strong social security fabric for one and all. The pandemic has underlined the need for urgency on this front. The massive allocation towards the health/well-being sector has set a historic precedent. Also, the idea of extending social security benefits to gig economy and platform workers and covering all categories of workers under the Employees State Insurance Corporation reaffirm the commitment of the government towards ensuring inclusiveness.
The pandemic also underscored the need for constant innovation, which is increasingly becoming the key differentiator for determining growth. The announcement to set up a National Research Foundation with an allocation of Rs 50,000 crore is laudable. However, we feel that the 200 per cent weighted deduction for in-house R&D facility should have been restored as this would have given a significant boost to the private sector expenditure on R&D. Some may argue that not all has been done.
For example, we were hoping to see some relief for the hospitality/tourism sectors in the Union Budget. These sectors are significant contributors to the country’s GDP and are highly labour intensive. FICCI is confident that at some time in the near future, tourism, hospitality, aviation sectors and others, will see some announcements. The time is now to focus on execution
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.