July 18, 2019

A budget for an Aspirational India – Five Areas that Budget 2019 will Propel India into the Superpower Orbit

July 18, 2019

A budget for an Aspirational India – Five Areas that Budget 2019 will Propel India into the Superpower Orbit

On 5 July 2019, Smt. Nirmala Sitharaman, India’s first full-time women Finance Minister tabled the Union Budget 2019 on behalf of the newly-elected government. While all of us have read the fiscal numbers and analysis, what this budget does is give a new direction to an aspirational India! A landmark plan, the budget lays the foundation for the next chapter in India’s economic history. As the Finance Minister noted early in her budget speech, mega programmes and services initiated by the government in its first term will further accelerate through the provisions of budget 2019.

Particular focus on local level entrepreneurship, uplifting India’ education system alongside world-class infrastructure and green power is undoubtedly a successful combination. Moreover, India being an agrarian economy, ensuring the most crucial stakeholders – the agriculture community is uplifted is a vision that as it gets implemented, will see an immense socio-economic change.

While formulating the budget, Smt. Sitharaman and her team have introduced multiple reforms to catapult the Indian economy towards a USD 5 trillion orbit by 2024.In our assessment, below are the five areas where the budget has delivered essential reforms that will help in building a strong nation:

1. Entrepreneurship:

The budget recognises that India Inc., particularly the micro, small and medium enterprises (MSME) segment, is creating jobs for our countrymen and fuelling economic prospects. Hence, to sustain the nation’s growth momentum, private organisations and neo-entrepreneurs must be supported. In pursuit of this objective, the budget proposes several initiatives “for kick-starting the virtuous cycle of domestic and foreign investments”. These include reforms to ease the approach to doing business in the country. Prominent measures include ensuring better access to credit, reduction of red-tapism and more power to women entrepreneurs. The new era will focus on the principles of smoother compliances, digitalisation, cashless transactions.

All over the world, entrepreneurship is at the heart of advancing economies. Undoubtedly, entrepreneurship is the bridge to India 2.0. By introducing measures to nurture this tribe, Ms.Sitharaman has taken a step in the right direction.

2. Agriculture:

The budget 2019 introduced multiple initiatives to fulfil that the government’s pre-poll promise of doubling the farmer’s incomeby 2022.One of the major announcements by the Finance Minister was the allocation of INR 1,51,518 crore towards agriculture and allied activities. Another initiative was thetarget to form of over 10,000 Farmer Producer Organisations (FPOs) over the next five years.Based on the principle of co-oporative marketing, FPOs have historically helped farmers lowerthe cost of cultivation and achieve higher realisation from sales.

In her speech, Ms.Sitharaman noted that “Ease of doing business and ease of living, both should apply to farmers, too”. In line with her thinking, the budget creates a pathway for agriculture and rural prosperity. The impetus provided to the sector will also propel the growth of allied agri-industries such as fertilizers, logistics and others.

3. Education:

The budget 2019 introduced multiple initiatives to fulfil that the government’s pre-poll promise of doubling the farmer’s incomeby 2022.One of the major announcements by the Finance Minister was the allocation of INR 1,51,518 crore towards agriculture and allied activities. Another initiative was thetarget to form of over 10,000 Farmer Producer Organisations (FPOs) over the next five years.Based on the principle of co-oporative marketing, FPOs have historically helped farmers lowerthe cost of cultivation and achieve higher realisation from sales.

In our view, the budget has adopted a well-rounded and far-sighted in its approach to education policies. It has aptly addressed the pain points and also made provisions to optimise the sector’s potential optimally.

4. Infrastructure:

The budget focuses on creating infrastructure assets that will trigger investments and propel faster economic growth. Ms.Sitharaman said that the government had allocated INR 100 crore to the sector over the next five years. The investments will be directed towards augmenting rural connectivity, creation of a national highway grid, completion of the dedicated freight corridor (DFC) and development of newer industrial corridors among other purposes. Further, the government indicated that public-private partnerships (PPP) might be the way forward to ensure faster development and delivery of passenger freight services.

A well-developed infrastructure is integral to the economic prosperity of the nation. By focusing on increased efficiencies for the infrastructure sector and its sub-sectors, the Finance Minister has emphasised the government’s commitment towards this objective.

5. Power:

Ms.Sitharaman and her team are in the process of formulating the ambitious One Nation, One Gridproject. The objective is to ensure power connectivity to states at affordable rates. She proposed to make available a blueprint for developing gas grids, water grids, i-ways, and regional airports.The budget also entailed revival schemes for state distribution companies and fuel-starved power plants that depend on natural gas. Also, the government will address the sustainability element by going green (pollution-free) and blue (water-secure). Our focus on solar power generation is well in line with the nation’s mood for a clean and sustainable environment.

The budget recognises that noted that a robust connectivity infrastructure is integral to India’s superpower aspirations. It is heartening to see that the plan has endeavoured to address the power sector’sage-old challenges on a priority basis.

Apart from these, the budget entails many more proposals that will change the course of the Indian economy. In a bold move, the government has steered clear of a populist mandate for the budget in spite of winning with such a thumping majority.Instead, the team has sustained its focus on the long-term vision of the nurturing a robust economy.

At AM International, we are enthused by the opportunity that the new budget offers not just to our group but to the entire nation. Indeed, the plan provides a clear pathway for the transformationof the nation – steadily directing the country into the trajectory of a developed economy.We are confident that the government will achieve its goals. As Ms.Sitharaman quoted in the speech, “Karya purusha karena lakshyam sampadyate.” (with determined human efforts, the task will surely be completed).

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