The Budget has attempted to balance near-term growth imperatives with long-term priorities.
In line with expectations, a big push has been accorded to infrastructure and logistics via Gati Shakti. The National Master Plan aims to massively upgrade India’s infrastructure; this will not just support near-term growth but will enhance the competitiveness of the Indian industry. The focus on 7 key engines helps to bring about much-needed synergy between infrastructure and logistics sectors. National Highway expansion by 25,000 km is a vital cog in this scheme. Gati Shakti is expected to create 60 lakh new jobs. The financing plan for these investments now looks much more robust and credible; both the Centre and States will now need to focus on its speedy implementation.
Delivery of digital and hi-tech services, the use of drones and a fund to finance agri start-ups are steps to ensure that agriculture growth does not falter. The agriculture sector has strong backward and forward linkages, which impacts the industry and overall economic growth. The Centre’s capex outlay of ₹7.5 trillion is significantly beyond expectations. This is a morale booster for corporates betting on capital spending in the future as public investment crowds in private capex. This reinforces my firm belief that a ‘Capex Mahotsav’ is on the anvil in India.
As the third COVID wave ebbs, demand outlook improves and recovery takes shape, private capex is sure to follow suit. Signs of this are evident in announcements made by many companies. In short, the budget aims to achieve overall macroeconomic growth and human welfare with a sharp focus on infrastructure, inclusive development, thrust to sunrise sectors, climate action and financing of investments.
