Union Budget 2019-20: First Take

Budget 2019-20: Finance Minister must be congratulated for not resorting to populist measures

N. Srinivasan. File   | Photo Credit: Bijoy Ghosh

The decisive mandate won by the NDA, led by Prime Minister, Narendra Modi, clearly showed that the people of India have placed their abundant trust in his strong leadership for giving them a performing and reforming government in the last five years.

The Budget, presented by Finance Minister Nirmala Sitharaman, has sought to fulfil the great expectations and aspirations of the people of India from the government in the second term.

Even while providing for substantial increase in outlays for various sectors, the Finance Minister has adhered to fiscal discipline and proposed to contain fiscal deficit at 3.3% of the GDP.

I feel we all should support the true intentions of the government to take the country forward, develop a new India and become a $3-trillion economy this year and a $5-trillion economy in the next few years as envisaged in the Budget.

In my view, the Budget has tried to address the stress in the economy and challenges being faced on the macro economic front. The Finance Minister must be congratulated for not resorting to populist measures.

The Budget has laid out a clear roadmap to stimulate investment-led growth and pursue the development agenda of the government more vigorously through a host of measures.

After addressing the legacy issues, achieving consolidation among the public sector banks and substantially reducing the NPAs, the Budget has provided recapitalisation support of ₹70, 000 crore to strengthen the PSU banks.

The Budget has recognised the critical role being played by the non-banking financial companies (NBFCs) and has tried to address the liquidity issue in the sector by announcing that NBFCs that are fundamentally sound should continue to get funds from banks and mutual funds. The Finance Mininster has announced that the government will provide a one-time, six-months partial credit guarantee for PSU banks for purchase of pooled assets of financially-sound NBFCs. The Budget has given a further impetus to the ambitious housing for all scheme by announcing construction of another 1.90 crore houses by 2021-22. For affordable housing, an additional ₹1.50 lakh interest deduction has been allowed, making a total of ₹3.50 lakh for the current year.

Given the huge capex of ₹1.5 to ₹1.6 lakh crore per annum required by railways, the Budget has proposed to use public-private partnership model to unleash faster development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services.

The Budget has continued the government’s thrust on strengthening physical connectivity via Prime Minister’s Gram Sadhak Yojana, industrial corridors, dedicated freight corridors, Bharatmala, Sagarmala and Jal Marg Vikas (inland waterways) and Udayan Schemes. For PMGSY-III, ₹80,250 crore is envisaged for upgrading 1.25 lakh-km road length over the next five years.

In line with the intention of the government for making a mega investment of ₹100 lakh crore in infrastructure over the next five years, the Finance Minister said that an expert committee would be set up to study the long-term finance and our past experience with development finance institutions (DFIs) and recommend the structure and required flow of funds through DFIs. This shows that the government is recognising the role played by DFIs in the past in providing long-term finance for projects.

In a bid to improve the employability of youths, the Finance Minister has announced that 10 million youths will be imparted industry-relevant skill training under the Kaushal Vikas Yojana.

To conclude, the growth- oriented Budget has sought to achieve a big transformation in the economy with a thrust on investment and job creation.

N. Srinivasan, Vice-chairman, The India Cements Ltd.

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Printable version | Jul 31, 2021 11:55:44 AM | https://www.thehindu.com/business/budget/budget-2019-20-shuns-populism/article28297680.ece

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