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  Opinion   Columnists  02 Feb 2024  Chandrajit Banerjee | Boost for aspirational India, inclusivity and green energy

Chandrajit Banerjee | Boost for aspirational India, inclusivity and green energy

The writer is the director-general of the Confederation of Indian Industries
Published : Feb 2, 2024, 12:03 am IST
Updated : Feb 2, 2024, 12:03 am IST

Interim Budget: Charting a Course for Inclusive Growth and Future-Ready India

 Union Finance Minister Nirmala Sitharaman with Ministers of State for Finance Pankaj Chaudhary and Bhagwat Kishanrao Karad addresses the post-Budget press conference, in New Delhi, Thursday, Feb. 1, 2024. (PTI Photo/Vijay Verma)
  Union Finance Minister Nirmala Sitharaman with Ministers of State for Finance Pankaj Chaudhary and Bhagwat Kishanrao Karad addresses the post-Budget press conference, in New Delhi, Thursday, Feb. 1, 2024. (PTI Photo/Vijay Verma)

The interim Budget encapsulates the singular commitment of the government to proceed on the “Amrit Kaal” journey with elan and fulfil the aspirations of a “New India” that is ready to take a winning leap forward to realise a higher goal of becoming a developed country by 2047. While providing primacy to growth with inclusion, the Budget attempts to infuse a new momentum to the economy and strengthen India’s remarkably resilient ecosystem so that the country emerges as a growth engine of the world.

The accent on addressing the socioeconomic challenges and improving the quality of life of every citizen of the country, with a special focus on youth, women, poor and farmers, is equally noteworthy and resonates well with the vision of New India.

The provisions to empower women is among the key pillars of the Budget and will increase women’s participation in the workforce. The move to extend the coverage under the Ayushman Bharat scheme to all ASHA workers, Anganwadi workers and helpers, expediting Poshan 2.0, improved nutritional delivery, encouraging vaccination for girls in the age group of nine to 14 years for prevention of cervical cancer, etc will increase the participation of women in the country’s workforce.

The decision to enhance the target for “Lakhpati Didi” from two crores to three crores would promote entrepreneurship among women. In fact, the self-help groups (SHG), some of which have become lakhpati didis, have been one of the best instruments for women’s empowerment by helping the marginalised and poor women come together and work towards economic self-sufficiency.

A well-articulated Budget, the government’s determination to move ahead with the execution of its vision to create infrastructure assets and channelising resources towards capital expenditure is exemplary and would spur the virtuous growth cycle and create jobs. The rise in capex outlay by 11.1 per cent to Rs. 11.11 lakh crores is noteworthy. So is the announcement of continuing the 50-year interest-free loan to states for capital expenditure. The PM Gatishakti rail corridors for energy, minerals, cement, port connectivity and high-traffic routes announced in the Budget are heartening and would improve logistics efficiency while bringing down logistics costs.

The interim Budget has an unmissable agriculture pivot with a firm commitment towards rural uplift and improving consumption demand while alleviating rural distress caused by patchy monsoons. Recognising that the path towards achieving the dream of “Viksit Bharat” hinges essentially on the transformation of the rural economy, the government has at the outset, announced its commitment to promote the much-needed investments in agri infrastructure by encouraging public and private investments in post-harvesting activities. Besides, the government would step up efforts for increased value addition under existing PM-SAMPADA and PM-FME which are expected to be beneficial to farmers and promote inclusive growth.

Further, the electronic agri mandi network and an accent on entrepreneurship and innovation will help in the deployment of technology solutions to make agriculture climate resilient. The move to set up a separate department for fisheries to encourage aquaculture production and exports, promotion of dairy sector, the “atma nirbhar” oilseed mission, etc, would encourage diversification beyond agriculture. The rural housing sector would get a fillip through the Rural Awas Yojana (Gramin) and act as a boon for the rural economy as it would create rural assets, transform rural growth, boost consumption, and rejuvenate the demand drivers in the rural economy.

Along with agriculture, the social sector has been a priority in the Budget to ensure protection of lives and livelihoods. The emphasis here is on health and education. Empowering the youth through the New Education Policy 2020, setting up new educational institutes for higher learning, promoting skill development, constituting a committee for building of more medical colleges, sanctioning of loans to meet the entrepreneurship aspirations of the youth, among others, are vital for improving employability and gearing up the growth engines of the economy.

The MSME sector, comprising 29 per cent of GDP, would gain significantly from government support towards the availability of timely and adequate credit, support to develop relevant technologies, provision of conducive regulatory environment and appropriate training for the Micro, Small and Medium Enterprises (MSME) sector. This will encourage units to build scale and compete globally.

Similarly, support to technology, R&D and an impetus to bolster the green economy reflects the futuristic vision of the government. The establishment of a corpus of Rs 1 lakh crore with a 50-year interest-free loan, which would provide long- term finance at low or nil interest rates, would encourage the private sector to step up investment in R&D and strengthen India’s competitiveness in the global landscape. Similarly, the new scheme for strengthening deep-tech technologies for defence purposes would promote “atma nirbharta” in high-tech manufacturing and sunrise industries in a big way.

At the same time, the focus on green energy is commendable. The provision of viability gap funding to harness offshore wind energy, strengthening the e-vehicle ecosystem and charging infrastructure, coal gasification, rooftop solarisation, among others, would promote sustainability and green growth.

Recognising that many of the announcements would achieve fruition essentially through participation with the states, the Budget proposes to build a consensus with the states for effective implementation of reforms — a pivotal move which would unlock the potential of the economy. The government’s move to withdraw certain outstanding direct tax demands would reduce tax litigation and improve ease of paying taxes.

The finance minister deserves credit for displaying astute financial management and eschewing populism to adhere to the fiscal deficit target at better than expected 5.8 per cent of GDP for the current fiscal while retaining the focus on capital expenditure which is no mean achievement considering the daunting external milieu and its impact on India. Moreover, the fiscal arithmetic appears to be broadly credible. The government has also done well to restrict fiscal deficit to 5.1 per cent of GDP for 2024-25, thus adhering to the glide path of achieving the goalpost of below 4.5 per cent of GDP by 2025-26.

Overall, the Budget outlines a broad direction for the economy — that of addressing short-term issues without losing sight of building long-term capabilities in the economy. No wonder, it is packed with a multitude of measures which would provide a fillip to growth with inclusion while adhering to the vision of making the Indian economy future-ready in our journey during the “Amrit Kaal”.

Tags: finance minister nirmala sitharaman, green energy, interim budget 2024