The future is not tense: It was a unique Budget in many ways

The Union Budget 2022 was another decisive step towards reforms and inclusive development. Even as Finance Minister Nirmala Sitharaman read her speech from a digital device like last year, the many references to digital initiatives in the Budget document on governance, health care, and education signalled the changing face of India.

It was a Budget that stayed clear of much of the populist schemes that are usually the staple of Union Budget speeches in the past. This Budget also evidenced the fact that we have moved forward with regard to stable tax policies by staying clear of any changes in tax slabs and rates.

Markets have also hailed the Budget with a rally on the back of continued stability in fiscal deficit at 6.4 per cent and a huge outlay in capital investment. At 4.1 per cent of GDP, the 35 per cent hike in government’s capital expenditure earmarked for boosting infrastructure will be a harbinger of employment and will also have a multiplier effect not only on private capex but also demand in general.

Despite the many lockdowns and hurdles to business record, GST collections of Rs 1.4 trillion is proof of India’s strong economic recovery. A nation’s strength lies in its people. The target of creating 4 million jobs looks like a distinct possibility with the emphasis on proposed capital investments of Rs 20,000 crore for transportation, 400 new Vande Bharat trains, 100 cargo terminals, and expansion of highways by 25,000 kilometres.

The PLI scheme could also add further fillip to growth and job creation leading to consumption demand. It would be interesting to see how the government will innovatively raise the capital for deploying in various schemes.

Disinvestments remain a critical aspect of this balance. With crude oil prices soaring past $90 per barrel, the impact on inflation, and fiscal deficit targets cannot be ruled out. The silver lining could well prove to be the 5G auction reserve price that is rumoured to be in the $5-6 billion.

It was a unique Budget in many ways. It was short yet expansive. It was ambitious in its outlays yet conservative in its revenues. It was futuristic yet had sufficient welfare measures for the present context. The Budget went beyond just numbers to focus on clean and green tech, AI, and blockchain.

It is beautifully crafted in terms of the substantial cascading impact it could produce. In years past, we often approached the Budget expecting to see changes in direct and indirect taxes. Those days are behind us. The Budget of today seeks to expand the economy and keep it at the forefront of technology.

The FM has managed to keep a vast array of subjects in the horizon while presenting a Budget whose aspirations are almost entirely futuristic. While there is adequate focus on the present economic revival, there are a lot of actions being initiated which can help keep India relevant, going into the future.

The writer is chairman, RPG Enterprises