Finance Minister Nirmala Sitharaman’s fourth successive budget, while commonsensical in its approach, is not exactly bubbling with new ideas. With the economy still in search of durable momentum that could help entrench the recovery from the last fiscal year’s record contraction, Ms. Sitharaman has missed an opportunity to address the flagging consumer spending in the wake of erosion in real incomes and savings through a combination of tax breaks for the middle class and cash handouts for the poor. And even as the Minister acknowledges the role public capital expenditure could play in crowding-in private investment at a time when “private investments seem to require that support” and help to ‘pump-prime’ demand in the economy, the Budget outlay of ₹7.50 lakh-crore for the capital account marks just a 24.4% increase from the revised estimate of ₹6.03 lakh-crore for the current fiscal. To be sure, Ms. Sitharaman’s speech highlights the PM GatiShakti, a “transformative approach for
The Tata Group’s consummation of its acquisition of Air India last week marks both the culmination of the airline’s return to its original founders after an almost seven-decade hiatus, as well as the start of an arduous long-haul flight for the loss-making, formerly state-owned flag carrier. The Tatas’ enthusiasm for winning back what was once the country’s iconic airline brand notwithstanding, the skies in which the industry operates have changed considerably. A look at the market share data from the domestic air passenger segment clearly shows that budget or low-cost flights now hold a dominant position, commanding about four-fifths of the market. The Tata group’s full-service venture, Vistara, with no less a partner than Singapore Airlines on board, has struggled to establish a foothold and with Air India’s addition, the Tatas find themselves saddled with a bulk of their combined domestic market share of 23% (as of November) being in the less-in-demand full-service segment. Nor is
M.Govinda Rao
The Budget is in the desired direction in the given circumstances, but its impact on the economy will depend on the efficiency of implementation
