For High-Growth & Equitable Society

Finance Minister Piyush Goyal has announced the Interim Budget 2019 that is both credible and pragmatic and sets out in the right direction for the economy for the next 10 years by enunciating an agenda to make India a $5 trillion economy in the next five years and a $10 trillion economy in next eight years thereafter. The roadmap in ten key dimensions lays emphasis on physical and digital infrastructure, green environment, rural industrialisation, water bodies, blue economy, space, agri and food, healthcare and governance.

 

The foundation in all these areas has been laid over the last few years. With deepening of reforms, the vision of a modern, technology-driven, high-growth, equitable and transparent society can be made a reality.

 

Take ‘Digital India’, for instance. A lot of progress has been made in connectivity and data accessibility. There has been increase in monthly consumption of mobile data by over 50 times in the last five years, spurred by increased affordability. Digital infrastructure is no longer the prerogative of the elite. It has started percolating to the villages. It is expected that every individual will be technology driven in the next ten years. This will take India to the next stage of the digital revolution.

 

In fact, the budget delivers more than what was expected. Shri Goyal has deftly addressed some of the key challenges facing the economy, sought to give a boost to the rural economy and activate the growth levers through proposals aimed at driving up consumption. These measures and the proposal to raise the taxable income slab upto Rs 5 lakh along with higher standard deduction will leave more disposable income in the hands of consumers, which, in turn, will boost demand in the economy. The introduction of Direct Income Support scheme of Rs 6,000 per year to farmers is a step aimed at benefitting almost 12 crore small and marginal farmers. ‘Envisioning India 2030’, a report released by FICCI at its AGM in December 2018, had proposed this strategy for the farm sector. The scheme is crucial as it will enable the government to cover all the small and marginal farmers. In contrast, the MSP scheme benefits just about 30% of such farmers. By committing funds from the central pool, any resistance from states will also be circumvented. However, States would have to help in identifying the beneficiary farmers.

 

Furthermore, animal husbandry and fisheries will also be eligible now for benefits of 2-5% interest subvention for loans availed through Kisan Credit Card. Interest subvention on farm loans provided during natural calamities has also been given for the entire period as against the first year alone earlier. With more income in the hands of the farmers, rural demand is bound to pick up and create a positive impact on several rural-oriented industries such as consumer goods, agriculture machinery, tractors, and two-wheelers and, in turn, spur investment in these sectors.

 

A number of measures are also proposed to revive the housing sector. The boost to real estate will have a multiplier effect on the economy and rekindle the growth impulses in the economy. FICCI has for long maintained that to crank up the economy, housing and real estate sector need to be promoted given their several forward and backward linkages. Every new home that gets constructed involves material and services from over 200 industries. The multiplier effect on construction and allied industries also play a vital role in job creation.

 

Social security continues to be a priority for the government. This is manifested in the introduction of Jeevan Jyoti Yojana, Atal Pension Yojana to Ayushman Bharat scheme announced last year. The budget takes this forward by announcing the Mega Pension Plan, the Pradhan Mantri Shram-Yogi Maandhan, for the unorganised workers. This is significant in that it will benefit around 10 crore workers in the unorganised sector.