Budget sets Indian economy on way to drive global growth

• The budget for FY 2022-23 has been presented in unique circumstances.
• Read along with the Economic Survey, it offers a convincing case of its economic management.

Improvement in stressed indicators and novel initiatives

• Gross and net NPA ratios are steadily declining.
• The capital-to-risk weighted ratio is now over 16.5 per cent from below 13 per cent in 2013-14.
• GST has now stabilised, with over Rs 1.4 lakh crore collections in January 2022.
• There has been record resource mobilisation through IPOs from a low of Rs 1,500 crore in 2013-14 to 1.04 lakh crore in 2021-22 (April-December).
• National highways doubled from 71,772 km in 2011 to 1,40,152 km in 2021.
• Operationalised airports doubled from 62 in 2016 to 130 in 2021.
• The privatisation of Air India is now complete.
• Other sectors like space, IT-BPO, drones, coal mining and geospatial mapping have been deregulated.

Budget steps to propel growth of India

Empowering future industry

• The taxation of virtual digital assets will bring them into the mainstream, making India a hub for the productive use of this resource.
• The drone industry, already opened to private enterprise, has been given a huge captive market by integrating it with agriculture.
• The battery interoperability protocol for electrical vehicles is potentially a game-changer as it resolves the conundrum of long charging times.
• The introduction of the government’s own digital currency, using blockchain, will further boost the digital economy.
• The time frame for availing the 15 per cent tax rate for new manufacturing units being extended till 2024 and tax incentives for start-ups being extended by a year will give impetus to sectors that have flourished in the last few years and created jobs.
• With over 25 per cent spending reserved for private-sector R&D and over 68 per cent of the defence procurement budget reserved for domestic industry, the military-industrial complex is finally on its way in India.

Empowering the 80 per cent to empower India

• The hugely successful ECLGS scheme, which provides credit to the MSME sector, has been extended by another year with an overall outlay of Rs 5 lakh crore, and Rs 50,000 crore is reserved for just the hospitality sector.
• With over Rs 2.7 lakh crore budgeted for direct benefits transfer to farmers as MSP, the rural economy will continue to be infused with cash.
• The huge increase in capex and infrastructure spends, especially in rural areas — such as the Rs 48,000 crore for housing and Rs 60,000 crore for household tap water — will create a virtuous cycle of jobs, consumption and growth in the rural sector.

Cycle of investment

• All the enhanced investment is in productive assets, and they create jobs across the skills value chain like:

1. Unskilled to semi-skilled jobs in rural areas through PMGSY and housing (over 80 lakh houses) and tap water connectivity (over Rs 1 lakh crore)
2. Semi-skilled jobs through Gati Shakti and national highway construction (25,000 km)
3. Skilled jobs in manufacturing sector
4. Highly skilled top-end jobs in startups and high-end tech jobs in the defence manufacturing industry.

• The PLI schemes will generate over 60 lakh jobs and over Rs 30 lakh crore of new production.