Union Budget 2022: Focus on long-term growth
The budget announced by finance minister Nirmala Sitharaman is neither anti-rich nor anti-poor. It is a matter-of-fact budget, focused on long-term growth of India. The Opposition will not have much to shout about.
The big picture of PM Modi is visible unmistakably behind this budget. A confident Prime Minister, confident of winning Y2024 Parliamentary Election, and is looking at the budget to play out till FY2029 and perhaps beyond.
There is no urgency to throw populist measures.
Economic growth is the sole underpinning of this budget and nothing else.
The seven focus areas of the budget are PM Gati Shakti, Inclusive Development, Productivity Enhancement, Sunrise Opportunities, Energy Transition, Climate Action, Financing of Investments. The big highlight is the use of technology in every important project being announced.
The Hon.FM has focused on raising Capex levels and investments in infrastructure to record levels. Forward steps have been announced in renewables, defense, PLI schemes, digital economy, ECLGS scheme extension for MSMEs, etc. However, execution is the pivot. Unlike China which built its economy on its nonresidents, India again has chosen to give possible OCI investments a pass by not bringing their investment at par with those of the resident investors.
Healthcare and real estate, these two sectors could also have been accorded a higher priority given the fact that India is still emerging out of the pandemic.
This article is as much about Budget as to decode PM Modi in making India reset at the global arena and to take on the ascendancy of China. Post WW2 “arrangement” is nearing its shelf life. Europe is getting unsettled.
Germany is no longer playing by the script. Germany wishes to give “more respect” to Putin, as articulated by the German Admiral in New Delhi (who lost his job).
A military man is unaccustomed in the doublespeak of a diplomat. The USA, Japan, Australia and Nato minus Germany are pitted against the China coalition. India is in the US camp but in close touch with Putin. India is being courted by all due to the size of its economy (currently $3 trillion), slated to be the 3rd largest globally. PM Modi obviously enjoys global attention.
It is all tied with India’s economy and GDP growth. India will sit on the global high table, possibly to be included as a permanent member of the UN Security Council, as long as it charts the economic growth.
That is possible if the Indian economy delivers. Budget is an instrument to operatioanlize it. PM Modi is thinking beyond FY2029. Budget 2022 is one small step towards India’s march to be the 3rd largest economy on the planet. The show has just started.
(Gopichand Hinduja is co-chairman of the Hinduja group)