Budget 2020, a tightrope walk indeed

Harsh Goenka

Harsh Goenka  

As I reached out for the remote at the end of the Budget presentation, I could not but help think about the daunting task of the FM and the bureaucracy, who spend months preparing for this exercise. As she made her Budget speech, trying to balance the expectations of the common man, industry and keeping India as an aspirational destination for investment through Sabka Saath, Sabka Vikas, Sabka Vishwas credo, it was evident that the task was difficult.

To address the divergent economic needs of multiple sections of society in the backdrop of sluggish growth, a dip in tax collections and slowing domestic demand while maintaining fiscal prudence at the same time, is no easy task.

The hallmark of the Budget was structural reforms in the financial sector. A robust financial infrastructure with adequate liquidity and credit access is the backbone of any economy.

The Budget proposed changes in the banking laws to enable public sector banks to raise funds from capital markets and flexible debt restructuring for the NBFCs. All of this along with looking to enhance professionalism and transparency in the functioning of the financial sector will augment India’s position as an investor destination and facilitate ease of doing business.

The opening up of Government securities to NRIs and FII stake in corporate bonds to 15% is a landmark move, which would provide the necessary depth to the bond market.

While there was no big-ticket announcement on infrastructure or investment outlay that would make one jump in excitement, it has become the norm to expect the impossible in every Budget. India has done some fundamental structural alignments over the past few years; GST being the most important of them all. In most situations like this, the economic growth prognosis will almost certainly be gloomy. The markets have fallen clearly indicating that the sentiment is not upbeat. But is there reason to be circumspect? On the expenditure side, the FM has allocated Rs. 2.83 lakh crore to agriculture. There is emphasis on warehousing facilities, solar pumps for farmers, agriculture credit facilities and support for horticulture.

The proposed Rs. 99,300 crore for education will go a long way to impart knowledge and upgrade skills of the workforce of tomorrow. Launch of the National Police University and National Forensic University are novel concepts.

(The writer is Chairman, RPG Group.)

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