Finance minister Nirmala Sitharaman’s maiden budget has the hallmark of the Modi 2.0 government.
The finance minister has laid down a vision to make India a $5-trillion economy based on the “minimum government and maximum governance” mantra while reiterating its focus on “Gaon, Garib Aur Kisan” in all key initiatives.
Some of the focus areas in this vision are physical and social infrastructure, and measures to achieve a pollution free India, digital India, Make in India, clean India, healthy India and an India that is self-sufficient in food.
To achieve this vision, structural reforms in the economy that will spur investments and job creation are key, which is being addressed with a slew of measures, both in terms of incentives as well as ease of doing business, for MSMEs and start-ups, considered to be the backbone of the Indian economy.
This will help strengthen the start-up ecosystem in the country. One key announcement was raising sovereign debt from overseas markets given India’s low oversees sovereign debt to GDP ratio. It will help provide more funds for investments to the private sector.
Budget 2019-20 had a substantial focus on infrastructure and connectivity. This will entail an investment of Rs 100 lakh crore by the government, private investments and public private partnerships over the next five years. Power is another focus area with structural reforms and initiatives such as “One Nation, One Grid”.
Rural India is another big focus area with a commitment to ensure housing, electricity, cooking gas, road connectivity and digital connectivity and access to all rural households.
The broader banking and financial services sector received a much needed support.
Ease of tax filing and tax scrutiny will go a long way in increasing compliance. Overall, a progressive budget. As always, execution is key. Benefits will accrue in the medium term.
Shanti Ekambaram is president – consumer banking, Kotak Mahindra Bank