Of all the Budgets she had so far presented, Nirmala Sitharaman’s fifth was seen as a critical one because of the approaching Lok Sabha polls. Persisting global headwinds and a high fiscal deficit made the task more complicated. But she has delivered, coming out with a Budget that seeks to build for the future — of the economy through stepped-up public investment in infrastructure; and of her party through carefully targeted schemes for different segments, including the vocal middle class.
She has gone about the task withoutjunking fiscal prudence, even as she effected a large increase of 33% in capital expenditure, now pegged at over Rs 10 lakh crore, with half of it earmarked for railways and roads.
Like the previous two Budgets, Sitharaman — who joined a select club of FMs to present five straight Budgets — is banking on the multiplier effect from the investment as it is expected to generate demand for inputs such as steel and cement and create jobs. She has resisted the pressure to deploy handouts, instead seeking to showcase policies aimed at turning India into a developed country, as a contrast to politics dripping with freebies.
FM banks on tax buoyancy, improved global outlook
Despite the steep hike in capex, overall spending is budgeted to rise 7.5%, with revenue expenditure such as interest payments, subsidies and salaries, projected to rise a mere 1 .2%. As a result, the government estimates that it will manage to keep the fiscal deficit at 5.9% of GDP, compared with 6.4% this year. She is, quite clearly, banking on tax buoyancy an d the somewhat better outlook of global economy to meet the target.
Infrastructure was one of the seven priorities of what Sitharaman described as the first budget of ‘Amrit Kaal’, wi th inclusive development, reaching the last mile, unleashing the potential of the economy, green growth, youth and the financial sector being the other thrust areas.
Sitharaman did not lose sight of some key constituencies. If artisans, several of whom would be from OBC communities, have been included in a new scheme, PM-Vikas, meant to skill them and market their products better, the fisherfolk o r mallahs will gain from fresh support under the Matsya Sampada Yojana. Then, there was an outreach to the vulnerable tribal groups.
The budget has a futuristic tinge to it, with provisions for artificial intelligence, internet of things, 5G labs, lab-grown diamonds, all of which reinforces the impression of a grand scheme being in place. Climate change has been acknowledged as a priority area. But instead of just viewing it as a challenge, Sitharaman has also approached it as an opportunity to give a push to the circular economy through incentives for scrapping aged vehicles.
Although there was only a mention in the speech, a major change will be thetransition from “manhole to machine-hole mode” for desludging of septic tanks. Over the years human scavenging has claimed several lives, including in metros.
FM Nirmala Sitharamanalso announced financial support for a large n umber of prisoners languishing in jails due to their inability to pay a penalty. The government has sought to address some key concerns in three employment-generating sectors — farming, micro, small and medium enterprises (MSMEs) and tourism. With paym ent problems being a major problem for MSME units, the government has sought to tighten tax rules for large buyers from the corporate sector to ensure that they pay up. Besides, it has sought to address problems that the sector faced during Covid-19.
In the farm sector, apart from credit flow and promoting millets, the idea seemed to be to promote innovation through start-ups for whom an accelerator fund is being set up. Similarly, cooperatives are sought to be used for creating storage capacity and new ones in the manufacturing sector have been given a tax boost w ith a 15% levy, which is on the lines of the corporate sector.
For companies, there were further simplifications as part of the ease of doing business initiatives, including a new scheme to tackle contractual disputes where arbitral awards have been challenged in courts. Sitharaman also announced a new DigiLocker for companies, while making PA N as the business ID.
She has gone about the task withoutjunking fiscal prudence, even as she effected a large increase of 33% in capital expenditure, now pegged at over Rs 10 lakh crore, with half of it earmarked for railways and roads.
Like the previous two Budgets, Sitharaman — who joined a select club of FMs to present five straight Budgets — is banking on the multiplier effect from the investment as it is expected to generate demand for inputs such as steel and cement and create jobs. She has resisted the pressure to deploy handouts, instead seeking to showcase policies aimed at turning India into a developed country, as a contrast to politics dripping with freebies.
FM banks on tax buoyancy, improved global outlook
Despite the steep hike in capex, overall spending is budgeted to rise 7.5%, with revenue expenditure such as interest payments, subsidies and salaries, projected to rise a mere 1 .2%. As a result, the government estimates that it will manage to keep the fiscal deficit at 5.9% of GDP, compared with 6.4% this year. She is, quite clearly, banking on tax buoyancy an d the somewhat better outlook of global economy to meet the target.
Infrastructure was one of the seven priorities of what Sitharaman described as the first budget of ‘Amrit Kaal’, wi th inclusive development, reaching the last mile, unleashing the potential of the economy, green growth, youth and the financial sector being the other thrust areas.
Sitharaman did not lose sight of some key constituencies. If artisans, several of whom would be from OBC communities, have been included in a new scheme, PM-Vikas, meant to skill them and market their products better, the fisherfolk o r mallahs will gain from fresh support under the Matsya Sampada Yojana. Then, there was an outreach to the vulnerable tribal groups.
The budget has a futuristic tinge to it, with provisions for artificial intelligence, internet of things, 5G labs, lab-grown diamonds, all of which reinforces the impression of a grand scheme being in place. Climate change has been acknowledged as a priority area. But instead of just viewing it as a challenge, Sitharaman has also approached it as an opportunity to give a push to the circular economy through incentives for scrapping aged vehicles.
Although there was only a mention in the speech, a major change will be thetransition from “manhole to machine-hole mode” for desludging of septic tanks. Over the years human scavenging has claimed several lives, including in metros.
FM Nirmala Sitharamanalso announced financial support for a large n umber of prisoners languishing in jails due to their inability to pay a penalty. The government has sought to address some key concerns in three employment-generating sectors — farming, micro, small and medium enterprises (MSMEs) and tourism. With paym ent problems being a major problem for MSME units, the government has sought to tighten tax rules for large buyers from the corporate sector to ensure that they pay up. Besides, it has sought to address problems that the sector faced during Covid-19.
In the farm sector, apart from credit flow and promoting millets, the idea seemed to be to promote innovation through start-ups for whom an accelerator fund is being set up. Similarly, cooperatives are sought to be used for creating storage capacity and new ones in the manufacturing sector have been given a tax boost w ith a 15% levy, which is on the lines of the corporate sector.
For companies, there were further simplifications as part of the ease of doing business initiatives, including a new scheme to tackle contractual disputes where arbitral awards have been challenged in courts. Sitharaman also announced a new DigiLocker for companies, while making PA N as the business ID.
