Union Budget 2019-20: First Take

Union Budget 2019-20 first take: A holistic and aspirational Budget

Finance Minister Nirmala Sitharaman has presented a very holistic and aspirational budget that aims to deliver on a $3 trillion economy based on inclusive economic growth.

She touched on a large swathe of sectors, from electric vehicles and entrepreneurship to women’s empowerment and water conservation, which are absolutely vital for inclusive economic growth. .

To ensure inclusive economic growth, the government needed to focus urgently on transforming the rural economy by providing robust physical and social infrastructure.

The Finance Minister did well to set a target of taking electricity and clean cooking facilities to every single rural family by 2022. To boost rural infrastructure, the Budget not only announced a substantial outlay for upgrading rural roads but also talked about speeding up internet connectivity to every panchayat .

To kick-start the rural economy, the Budget unveiled modernisation schemes and focused on agricultural aggregation through setting up 10,000 new Farmer Producer Organisations. Setting up livelihood business incubators and technology business incubators to develop 75,000 agri-entrepreneurs is also a step in the right direction.

R&D boost

Research and Development is of strategic importance to build a skilled, knowledge-led economy. This is especially true for a country like ours where R&D spending has stagnated at around 0.65% of GDP for two decades.

The Finance Minister’s proposal to establish a National Research Foundation to fund and promote research is thus welcome.

This Budget has done well to address the issue of ‘angel tax’ with Ms. Sitharaman announcing that start-ups and their investors will not have to undergo any kind of income tax scrutiny on their valuation if they are verified by the government.

I am glad that the government has made access to safe drinking water a key element of the India development agenda by promising to ensure that every rural house gets water by 2024 under the Jal Jeevan Mission.

Considering the fact this this was the maiden Budget of NDA 2.0, the Finance Minister could have taken some bold decisions. We lost the opportunity to revive the private sector investment cycle by extending the 25% corporate tax to the entire India Inc., which would have buoyed market sentiment and kick-started the investment cycle.

She could also have done more to simplify the GST regime. While the Finance Minister spoke of a simplification of the norms for filing GST returns, she missed out on the opportunity to rationalize rates.

Another disappointment was the failure of the Budget to announce a road map to support the Ayushman Bharat program, which was introduced last year and was mentioned in the Economic Survey yesterday. There is an urgent need to increase the public health spending to 2.5% of GDP.

Kiran Mazumbar-Shaw is CMD, Biocon.

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Printable version | Jun 14, 2021 12:01:36 PM | https://www.thehindu.com/business/budget/budget-2019-20-first-take-a-holistic-and-aspirational-budget/article28298273.ece

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