Another Budget speech has come and gone! As the dust settles, experts will analyse the fine print, pro-government voices will shower praise on the Finance Minister for her ‘visionary’ budget, and with equal vigour, critics will pour scorn on the ‘unimaginative anti-poor’ budget! This is the lot of every FM.
Viewing it dispassionately, however, one must commend Nirmala Sitharaman for resisting the temptation of pandering to vote banks, especially in the context of the upcoming elections in key States. Equally, she has made bold to leave direct taxes almost untouched, notwithstanding the myriad demands for raising of exemption limits and increases in deductions under various sections of the Income Tax Act. Admittedly, there were some justifiable demands for reliefs, especially from the much-harried salaried class, especially in these COVID-19 pandemic-ridden times. The FM has, however, chosen to look beyond the here and now, and painted a bold vision for India@100!
While the Budget paints a wide and varied canvas, there are two areas that I specifically choose to focus on. The PM Gati Shakti master plan covering roads, railways, airports, ports, mass transport, waterways and logistics infra, is indeed a laudable step, given the wide-ranging benefits it confers across various sectors such as cement, steel, commercial vehicles, and earthmoving and construction equipment, not to speak of its vast employment generating potential. India has already derived significant benefits from the Golden Quadrilateral, and as more of our roads become world-class, these benefits will only increase. The idea of a master plan to focus on the entire spectrum of goods and people movement has, therefore, not come a day too soon. The sharp increase in public capital expenditure by 35.4% to ₹7.50 lakh crore in 2022-23, is an equally welcome step, although the actual spending in the current fiscal appears to be tardy. It is one thing to allocate, and quite another to spend!
Watch | Highlights of Union Budget 2022-23
Considering the additional committed expenditure allocations of the government, in a pandemic year, there were concerns that the government would see a slippage on its fiscal deficit target. Happily, there appears to be only a marginal slippage at 6.9%, as against a budget target of 6.8% of GDP in 2021-22, which is projected to come down to 6.4% next year.
The key concerns for the government in the coming fiscal would be international crude oil prices and the intensity and trajectory of the ongoing pandemic. If, as the Cassandras predict, prices hit $120 per barrel, there will be serious implications, both from the balance of payments and inflation perspectives, and could very well be disruptive of the ambitious plans outlined by the FM. Similarly, should the pandemic — God forbid — continue to wreak its debilitating consequences on lives and livelihoods, the engines of growth are likely to sputter. Hopefully, these dire situations will not come to pass.
I had written in this column some years ago, that the most difficult and thankless job of all in our country is that of the FM. It still is, and all credit to her for making a fist of it.
TT Srinivasaraghavan, former MD, Sundaram Finance Ltd.
