India today finds its place among the global leaders as the fifth largest economy in the world, surpassing Great Britain and is likely to ascend to the third place by 2035. In the last nine years, India’s per capita income and the size of its economy have almost doubled. On account of this growth trajectory, the International Monetary Fund marks India as a bright spot on a dark horizon. It has also pencilled in India’s FY23 growth at more than 6%, which is the highest among major economies of the world. Despite the war and the residual effects of the pandemic, India is among the few economies with the lowest rate of inflation.
However, this feat – unusual for a still-emerging economy – took immense courage and countless sleepless nights on the part of the prime minister.
In a rather counter-intuitive move during the peak of the pandemic, Modi took an audacious decision to stick to his reform-for-growth agenda.
Atmanirbhar Bharat push
It was a time when major economies threw the growth agenda under the bus to tackle the raging pandemic. India remoulded its dreams to fit into the new dimension and charted its path thereon with the Atmanirbhar Bharat push while managing the pandemic deftly.
This was dovetailed with the efforts made by the regime to get rid of corruption, improve the health of the banking sector, get rid of policy paralysis, promote accountability and transparency in policy-making, etc., in a bid to create a conducive business ecosystem.
The move paid off in the post-pandemic era as foreign footloose capital flocked to the Indian stock markets, abandoning the otherwise lucrative capital markets. The buoyant tax collection after the pandemic is another marker of the resilience of the economy. As on date, India garners ₹1.49 lakh crore per month as GST.
India leaped ahead in one after another global rankings, surpassing nations mightier in economic prowess. It clocked more than 70 billion digital payments in 2022, which is the highest in the world. Boosting of air connectivity made India the world’s third-largest aviation industry. Railways being taken to remotest areas like Kashmir and Northeast made business in the Indian economy more luring by decreasing the landing cost of products substantially.
The new spreadsheet is to be seen in a continuum of earlier budgets that provided the economy with its much-appreciated resilience. It is aimed at pulling massive investments and businesses by introducing a slew of disruptive measures.
The budget pumps in major capital investment of ₹10 lakh crore, increasing the outlay by 33%, which will fast-track the implementation of government programmes such as Bharatmala, Gati Shakti, Parvatmala and Sagarmala. The highest ever capital outlay of ₹2.4 lakh crore for railways will help Indian Railways increase its modal share and connectivity to remote areas. Similarly, 100 transport infrastructure projects have been identified for end-to-end connectivity for ports, coal, steel, and fertiliser sectors. The proposed revamping of 50 airports, heliports, and advanced landing grounds will enhance air connectivity to remote areas.
In a rather disruptive move, the budget also ushers in an initiative of green growth. The major parts of this reform comprise incentivisation of alternative fertilisers, the proposal of 500 new waste-to-wealth plants, mangrove plantations along the coastline, and promotion of battery storage systems. Standing true to the Modi government’s principle of growth with responsibility, the budget provided for an outlay of ₹35,000 crore to achieve energy transition and net-zero objectives, listing green growth among the seven priorities of the government. Mission Green Hydrogen, which is hailed as one of the game-changing initiatives of the government in enhancing India’s soft power in the global scenario, gets an allocation of ₹19,700 crore, leading to a further boost to the economy and generating employment opportunities.
Keeping up the pace that India has already gained in the digital economy, the budget also pushes for the new economy by way of building digital public infrastructure for farmers, decrease of custom duties on the import of lithium-ion batteries from 21% to 13%, commodities except for textiles and agriculture, and certain inputs for mobile phones. These moves will add a multiplier effect on already acquired gains in the new economy. The cutting of import duty on lab-grown diamonds throws open a new door of opportunities for India by way of creating jobs and capital. In addition to it, the extension of tax benefits to startups till 2024 will prove to be a turning point for India’s innovation ecosystem.
The innovation ecosystem gets further assistance as the budget also envisages the launch of a unified Skill India digital platform, which will focus on formal skilling as per demands, provide access to entrepreneurship schemes, and also link job seekers with employers, including MSMEs.
The budget also provides a big relief to middle-class taxpayers and lifts the threshold of income tax from ₹5 lakh a year to ₹7 lakh a year. The changes in income-tax slabs and reduction of surcharge across all segments will benefit the taxpayers.
Abiding by the guiding principle of ‘Sahakar Se Samriddhi’, several steps have been taken to promote the cooperative sector. The budget sets the aim of setting up a national database for cooperatives to ensure better policymaking for the sector. It also provides for the creation of decentralised storage, which will be the world’s largest grain storage programme. Moves to set up 200,000 multi-purpose cooperative societies, covering trades like dairy and fisheries, in all panchayats will take the movement to new heights. In a commendable move, it keeps the cooperative societies in the manufacturing sector formed till March 31, 2024, in the bracket of only 15% tax. It also provided tax relief of ₹10,000 crore to sugar cooperatives.
The decision to cap TDS on cash withdrawal to ₹ 3 crore, providing a higher limit of ₹2 lakh per member for cash deposits and loans in cash by PACS and primary cooperative agriculture and rural development banks will enthuse the sector. These moves will help the cooperative sector contribute to national growth.
PM Modi’s pragmatic and persuasive foreign policy and his diplomatic acumen make India’s prospects in the global arena stand tall. India currently has 12 FTAs and the India-UAE CEPA is the latest one. We are working on several other deals. PM Modi’s initiatives are leading to the restoration of the global supply chain in which India is likely to become a major player.
The Amrit Kaal budget takes quantum leaps, enabling seamless growth through governance by initiating a global mission for millets, launching a dedicated mission for particularly vulnerable tribal groups, and recruiting more teachers for 740 Ekalavya model schools. This includes establishing 157 new nursing colleges, research initiatives in pharma, and a mission to eliminate sickle cell anaemia.
Located in the middle of the broad principle of ‘Sabka Sath, Sabka Vikas’, it disrupts the rural economy by setting up a ₹20 lakh-crore agricultural credit system for animal husbandry, dairy, and fisheries sectors, along with an allocation of ₹6,000 crore in PM Matsya Sampada Yojana and ₹2,200 crore in Bagwani Yojana. These will not only boost rural economy but also create employment opportunities.
One of the most encouraging aspects of the budget is that it ticks all the boxes of growth and welfare while keeping the fiscal deficit as low as 5.9% of GDP. It proves the fiscal health of the economy and also clearly indicates that with this inbuilt power of the economy, India will sail to its goal of becoming a global superpower in the Amrit Kaal.
I congratulate Prime Minister Narendra Modi and finance minister Nirmala Sitharaman for furthering an all-inclusive vision through this budget, which will not only lead India through the path of growth but also welfare catering to the needs of both citizenry and business.