In that respect, economists who were expecting that Union Finance Minister Nirmala Sitharaman would prioritise growth over fiscal consolidation by boosting spending, especially since the country is on the path to regain the world’s fastest-growing major economy title, would not be disappointed. The budget is definitely heavy on growth leading to former Finance Minister P Chidambaram calling it ‘the most capitalist speech ever read by a finance minister’. That criticism aside, for the middle class there was little relief as Income Tax slabs remained unchanged. They had been expecting some change.
India, the Finance Minister said, was in a strong position to withstand challenges, with an estimated growth of 9.2 per cent in the current fiscal year. Yet, a day ahead of the Budget, Sitharaman, presenting the Economic Survey had admitted a further fall in India’s economic growth to 8-8.5 per cent in the coming fiscal year from April, which casts a shadow on growth in the coming 12 months beginning April next. Will the Budget ignite growth? Still, it cannot be denied that Sitharaman presented a Budget with provides an impetus for the economy, and as she said, continues the journey with strong growth. If that growth does occur as envisaged, it could be possible for India that is a fast-growing economy to claim superpower status.
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The Budget at Rs 39.45 lakh crore proposes a 35 per cent hike in capital expenditure to Rs 7.5 lakh crore and focuses on higher spending on highways to affordable housing. Infrastructure is going to be the key to growth and employment, of which 60 lakh jobs are expected to be created in the next five years. There clearly is intent, there is a plan and there are allocations to support the India @100 goal, what needs to follow is the implementation. The possibilities definitely exist, especially if the foundation that is now being laid is strong enough to support the growth that is to come. The success of this will depend entirely if the groundwork created now is sound.
While industry generally welcomed the Budget, the Sensex that had risen in the early morning trading in the hope of a favourable finance bill, kept its upward momentum through the day as the Finance Minister was reading the speech in the House, a key indicator that the markets were also approving the Budget. The Sensex ended the day some 800 points higher. The spectre of inflation, however, does cast a shadow over the growth potential. It is true, as the Finance Minister said, that inflation has not only hit India but has reappeared as a global issue. How does India handle it? That is not clear in the Budget, but the government cannot ignore it.
This was a mid-term Budget that was expected to be targeted at the States going to the polls this month, but there was nothing in particular for Goa, Uttar Pradesh, Punjab, Uttarakhand and Manipur. On the other hand, every sector was touched upon, nothing was left out and there was a focus on empowering citizens. It is the delivery of what the Budget has listed that needs to be seen. The outcome will depend on that alone. Plans are always possible to make, it is when they reach the common man that they can be said to be successful. Sitharaman has presented a Budget that takes a long term perspective of growth and keeping a modern India in mind. Now to execute what has been outlined.
