Guest column: Significant boost for Rural infra projects

It is heartening to witness our finance minister Nirmala Sitharaman’s attempt to depart from a conventional budget articulation and present a medium-term vision for the country.

One of the welcome initiatives is the government’s resolve to invest 100 lakh crore in the infrastructure sector over the next five years, which would mean 20 lakh investment per annum. In the absence of details of the financial budget, it will not be possible to comment on the revenue mop-up needed to support such a high level of capital formation. But, she has touched upon creation of credit default swaps, interoperability between RBI and SEBI, 100% FDI in insurance sector etc. as some of the key measures.

The Budget provides a significant boost to the rural infrastructure and economy with a target of 1,25,000 km roads, which would mean completing 200 km per day — a tough but achievable target with money and will power. It is heartening to learn that the time taken to build a house was brought down by the government from 314 days to 114 days, and it aims to build 1.95 crore rural houses in the next two years. After a very long time, the government also announced schemes for fishermen, who constitute a significant portion of the self-employed population. She has perked up the rural economy by announcing to setup 100 rural clusters of bamboo, khadi and honey incubators to uplift the livelihood of artisans in these sectors, apart from 10,000 new Farmer Producer Organisations (FPOs).

By citing the example of feeding an elephant versus allowing it to trample the paddy field, she emphasised on the need for simplification of the tax regime. This reflected in the plan to digitise commercial transactions wherever possible, for example, GST filing as well as online invoice printing proposals. She also announced incentives and participation of global players to augment manufacturing of new age technologies in India comprising semiconductors, solar photovoltaic, lithium storage batteries, solar electric charging infrastructure, semiconductors. The push towards e-mobility with a tax concession of 1.5 lakh for loans taken for buying e- vehicles is a welcome move.

The industry should not expect miracles because we have enough and more issues to be sorted out, and the government will attending to them progressively.  A minor disappointment from the Budget is the area of exports that needed more attention, considering the mounting trade deficit. The Indian industry needs support to achieve a level playing field to compete in the international market. This calls for improved fiscal policy and banking support, and I am sure the government will address them subsequently.

M.S. Unnikrishnan,MD & CEO, Thermax