Budget 2019: View- Sops for taxpayers, farmers to give consumption a Rs 93,000-cr boost

By: Pawan Munjal, Chairman, Hero MotoCorp Ltd
Interim finance minister Piyush Goyal – who was quite impressive on Friday with his articulation of the government’s vision – has managed to contain fiscal deficit at 3.4% of GDP for the current year, and has maintained the same at 3.4% for fiscal ’20.

The budget rightly focuses on consumption and rural theme. With farm distress clearly visible, the allocation for the agrarian sector is likely to bring the much-needed respite.

The announcement of the direct benefit scheme will benefit 120 million small and marginal farmers and the income tax sops will impact around 30 million low-income taxpayers. Together, just these two schemes will put an estimated Rs 93,000 crore in the system, thereby boosting consumption and helping the rural economy to some extent.
The other laudable initiative is the monthly pension scheme for the unorganised sector. This is certainly a welcome step, but we need to look for a holistic social benefit and medical care scheme for every citizen of the country, and not just one particular section.

Infrastructure investment should have been a part of this budget. Other than the allocation for the railways, we did not hear much on infrastructure growth. However, considering this was an interim budget, we expect the new government to address these issues.

As the minister said, India at present seems to be the brightest spot on the global map. But is the growth rate of 7.5% in 2019 adequate for a nation with such a large population and capabilities? We are the world’s fastest growing major economy and if we do aspire to be a developed one, we will have to look at a doubledigit GDP growth.

Going forward, the government should come up with more structural steps and generate new jobs and employment opportunities to bring more people into the income group.

India’s domestic demand has started to strengthen as the country has witnessed benefits of structural reforms like GST harmonisation and bank recapitalisation.

The FM underlined 10 most important ‘Vision 2030’ dimensions that will guide this government. The framework is laudable, but the key will lie in proper strategising, putting the right kind of investments and other resources, and time-bound execution of the programmes.

This is crucial, as the country has embarked on a massive digital transformation, capitalising on cutting-edge technologies to emerge as a key driver of global progress in the years to come, thus ready to take the lead in Globalisation 4.0 – the theme at the recently concluded World Economic Forum at Davos.

All in all, it was a budget to bring the market back to the growth path from the sluggishness of the recent few months, but we need to aim much higher as a nation with such immense capabilities and potential.