Prime Minister Narendra Modi spoke of the whole world watching the budget a day before its presentation in Parliament. What does this mean? Why should the world watch India? And what does the budget do that justifies this statement from the PM?
The whole world is in the midst of a chaos brought in by the Chinese virus and the ongoing Russia-Ukraine War. China itself is in the midst of virus attack, with extended lockdowns in many provinces. On the economic front, the world is going through a big reduction in growth or recession in many countries. Coupled this with the high inflation, there could not have been a worse time for economic conditions.
However, the Indian growth story continues – as evidenced from the close to 7 per cent growth (though a bit reduced from the 9 per cent expected initially). The Ukraine-Russia war, supply chain disruption and imported inflation didn’t stop India from growing. We grew when the world was receding – that is what made the International Monetary Fund (IMF) comment that India is a bright spot in an otherwise dismal context worldwide.
Come to think of it – the 5th largest economy in the world, India, is growing, with a massive control on inflation. It has reached below the crucial 6 per cent mark, which is hugely commendable when advanced countries, which would hardly have 1.5 per cent inflation rate, are now struggling to contain double-digit inflation. How did India achieve this is a matter for another article – but in one sentence, it was the excellent strategy of not wasting a crisis – that led to PM Modi and FM Nirmala Sitharaman focusing on supply-side revival instead of pushing the demand side blindly like the US etc., which did the trick.
So, the whole world is watching India from these angles:
1. As a destination for investment when other countries are stagnating
2. As a market for the goods & services produced in their country
3. As a future superpower, the direction it is taking in its milestone “Amrit Kal”
Undoubtedly, India is opening up its sectors to investment from the outside world. With an FDI inflow of over $ 85 Billion in 2022, India showed the world that we are here for the long haul. Compare this with a mere $ 36 billion in 2014, and one can know the increased confidence in India even in the harsh economic times. The lack of confidence in China that is leading to manufacturers like apple, Samsung and their vendors moving out – is being absorbed by India. And it is this aspect the world is watching with interest to invest more in India.
Ease of doing business is being repeatedly increased with obsolete rules & compliances of over 39,000 being removed and over 3,400 provisions being decriminalised speaks of how much we value the wealth creators. Therefore, there is a steep increase in startups and entrepreneurs taking India to bigger heights, with over 100 unicorns & 4 decacorns from India! The “road to prosperity” is through strong, futuristic infrastructure creation. And this budget has earmarked 10 Lakh crore for capital expenditure like roads, ports, railways etc. (a massive jump of 33 per cent over the last year and nine times more than what it was in 2012 of 1.2 Lakh crore). And including the support & investment of states, the capex will hit a massive 13.7 Lakh crore, which has the potential to galvanise the Indian growth story. That is indeed the story of “Gati Shakti” which has envisaged a 100 Lakh crore capital investment in the next five years to take India to a USD 10 Trillion economy by 2030.
The second aspect of why the world is watching – is to see the country as their market for their goods & services. This means that India should have a thriving middle class capable of higher consumption. This presupposes a large amount of employment, income & consumption. With a significant focus on youth, skills, a New education policy and a tax regime that is simple, convenient and leaves more money in the hands of the people, one can see that the consumption-driven growth will complement the investment-driven growth. Indeed that would be a double plus for our country. Reduction in tax rates in the personal income tax bracket for the middle class is indeed a step in that direction.
There is a steep increase in startups and entrepreneurs taking India to bigger heights, with over 100 unicorns & 4 decacorns from India! The “road to prosperity” is through strong, futuristic infrastructure creation
The third and most important aspect of this budget is – what perception of India will the world carry about us? Will we be a country with deep inequalities (like the USA) or forcible workforce-driven economies (like communist countries like China) is what the world is watching? India believes in a worldview of “Sarve janah sukhino bhavantu”, and in its quest to be a developed country in the next two decades, no one will be left behind. Therefore, the “inclusive development” mantra of PM Modi is seen in this budget. Focus on the most vulnerable segment of SC / ST/women etc is to ensure that, let alone just support these segments, India is empowering them to further strengthen India in days & years to come.
So, on these aspects, the world is watching India, and FM Nirmala ji has done justice to the expectations of PM Modi today. With a budget size of 45 Lakh Cr (from a mere 15 Lakh Cr 10 years ago), with a booming economy with a GDP of around 270 Lakh Cr vs 123 Lakh Cr in 2014, India has prospered under BJP rule.
This Amrit Kaal – is about to put India at the top of the global table. The guidance of “Saptarshis” (signifying the selfless wisdom & guidance given by the rishis for the welfare of the common person – Antyodaya) reflects our vision for the future.
Seven priorities – as Saptarshis to guide us in the Amrit Kaal are well defined below –
1. Inclusive Development – women, SC / ST / OBC / deprived segment
2. Reaching the last mile – water, housing, electricity, education
3. Infrastructure and investment – 100 Lakh crore in capex
4. Unleashing potential – Karmayogi, youth skilling
5. Green Growth – future of the world (Ekatma Manavata Darshan speaks of Srakruti & Samasti having balance. This reflects this thought)
6. Youth Power – startups, skills and education
7. Finance Sector – The lifeline of an economy, making it less complicated & simply regulated, is the way to further strengthen our economy.
With no eye on any vote bank but focused only on development & India’s prosperity – today’s last full budget by the Modi Government in this term (2019-2024) deserves a standing ovation. And a mountain of gratitude for putting India above individuals.
(The writer holds a PhD from IIMB and heads Economic Cell for BJP, Karnataka)