For a government that has been in office for all of six weeks, the expectation of a Union Budget high on big bang reforms was hardly realistic. More so against the backdrop of an economy faced with daunting challenges such as inflation, low capital investments hindering growth in industrial output, and slowing thrust on infrastructure, to name a few.
Yet, the Finance Minister’s speech started with a lot of promise, especially the announcement around Foreign Direct Investment in insurance and defence, the need for a big push to the manufacturing sector, the emphasis on infrastructure projects using the appropriate PPP model, and the vision for the development of smart cities. However, the later part of his speech failed to rise up to that promise. In covering a plethora of areas, the Finance Minister left the impression of a statement of intent that could lead to more government on the economic front, not less.
On balance, however, there were several announcements that were laudable, such as the significant investment of Rs. 38,000 crore in the construction of national highways and state roads, disinvestment by banks to meet Basel III capitalization norms, and newer investment vehicles such as the creation of Infrastructure Investment Trusts (on a modified REITs type structure) to mobilise infrastructure investments.
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But the one big positive takeaway for me was the underlying theme of job creation by catalysing focused skill development and providing a fillip to entrepreneurship. In proposing a Rs. 10,000 crore fund to provide equity, quasi equity, soft loans and other risk capital for start-up companies, the government has sent the right signal that a vibrant entrepreneurial ecosystem will be the cornerstone of fulfilling the ever burgeoning employment needs of the country.
Specifically, from the IT/BPM industry standpoint, the Budget presented a vision for a “Digital India”. The “Digital India” programme, including broadband connectivity up to the village level, will promote greater inclusion while enabling improved access to services through IT-enabled platforms. Leveraging technology for improved access and governance through the Ebiz, E-kranti, E-visas, Financial Inclusion Mission, among other initiatives, will help improve technology adoption in the domestic market.
In addressing the needs and expectations of an investor-friendly growth agenda that the budget has attempted to articulate, a positive and supportive role on part of the tax authorities would be critical.
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(The writer is vice-chairman, Cognizant)