Finance Minister Nirmala Sithraman in her 8th consecutive budget speech made strong pitch for manufacturing growth with big support to MSMEs, outlining a roadmap for “Vikshit Bharat” aspiration and ensuring “sabka vikas”. The four engines – agriculture, MSMEs, Investment, and exports – she focused upon in her speech touches the lives of every citizen of the country. This budget is aimed towards accelerating growth, secure inclusive development, invigorate private investments, uplift household sentiments, enhance spending power of India’s rising middle class.
In agriculture, instead of relying on providing subsidies only, the focus is to enhance agricultural productivity by adopting crop diversification, sustainable agriculture practices, augmenting post-harvest storage, improving irrigation facilities, and to make available long-term and short-term credit. This will help in raising farmers’ income and give a big boost to rural demand. The development of rural India will not only ensure balanced growth of all regions but result in inclusivity.
The second focus area of Finance Minister was MSMEs, which contributes significantly to manufacturing GDP, exports and employment generation. In her budget speech she acknowledged that currently, over 1 crore registered MSMEs employ 7.5 crore people, and generating 36 per cent of our manufacturing. These MSMEs are responsible for 45 per cent of India’s merchandise exports. The MSMEs face two very critical impediments in their businesses are challenges on technological upgradation and access to credit. The budget has made provisions for enhanced credit availability and clean tech manufacturing.
As regards investment as third engine, the Finance Minister emphasised investing in people, economy, and innovation. India has a huge requirement for capital investment across all sectors – manufacturing, services, infrastructure and human development. The budget proposes that each infrastructure-related ministry will come up with a 3-year pipeline of projects that can be implemented in PPP mode, and States will also be encouraged to initiate and seek support from the India Infrastructure Project Development Fund (IIPDF) scheme to prepare PPP proposals.
The Finance Minister also announced slew of measures under investing in people and innovation that included Saksham Anganwadi and Poshan 2.0′ programme, setting up 50000 Atal Tinkering Labs in government schools, providing broadband connectivity to all Government secondary schools and primary health centres in rural areas, and expanding the capacity of IITs amongst others.
Export has been designated as fourth pillar. An Export Promotion Mission to be set-up with sectoral and ministerial targets, driven jointly by the Ministries of Commerce, MSME, and Finance. It will facilitate easy access to export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in overseas markets. Besides, a digital public infrastructure, ‘BharatTradeNet’ for international trade will be set-up as a unified platform for trade documentation and financing solutions. This will complement the Unified Logistics Interface Platform. The budget also proposes to extend support to develop domestic manufacturing capacities for India’s integration with global supply chains. Sectors will be identified based on objective criteria.
Overall, this union budget ticks all boxes to qualify as “People’s Budget”, which our Hon’ble Prime Minister too echoed. The big tax relief for middle class would be a force multiplier in terms of saving, investment and demand growth. The investment in people and innovation would have a big positive impact on productivity.
Deep Kapuria is the Chairman of The Hi-Tech Group of Companies comprising The Hi-Tech Gears, The Hi-Tech Engineering Systems, The Hi-Tech e-Soft, and Novus Hi-Tech Robotic Systemz. The Group has manufacturing, R&D and engineering facilities in India, Canada and USA. He is also the Past Co-Chair of Digital Economy and Industry 4.0 Task Force of B20, 2018 Argentina and Past Co-Chairman, CII National Committee on International Trade & Trade Policy.
