Budget 2023: Proposals offer a compassionate note for middle class
By investing in infrastructure, which lays the foundation for manufacturing, government has employed a long-term strategy
India's Finance Minister Nirmala Sitharaman. ANI
Budget 2023 has played a sweet tune to boost the nation’s sentiment–offering a compassionate note for the nation’s middle class, food security, and care for the less privileged. It also showcased the government’s commitment to increasing and improve our country’s infrastructure both in terms of quantity and quality. But what really set the stage ablaze was the soulful solo of igniting and encouraging millions of entrepreneurs to build a new India.
Thoughtful strategy
It is essential to recognise the significance of high capex Investments in building robust infrastructure. An allocation of Rs 10 lakh crores, a significant increase of 33 per cent will address two critical challenges for new India–improved global standard infrastructure and unemployment. The modernisation of railways and the expansion of roads, ports, and new airports will lead to job creation in short term, while the resulting improvements in logistics, communication, and other essential services provide a strong foundation for sustainable economic growth in the long run.
While there could have been a provision for a direct boost to the manufacturing sector for the short term, the government probably realises that building our manufacturing industry is a gradual process that requires a substantial investment in both capital and human resources. Hence, by investing in infrastructure, which lays the foundation for manufacturing, it has employed a long-term strategy to address this issue, that has the potential to pay off for generations to come.
Boost to entrepreneurship
An extension of three years to claim the benefit of continuing losses for startups is another move towards encouraging the country towards an entrepreneurship-led culture of creating jobs in the private sector to productively employ the youth. Beyond fiscal numbers, the government has consistently upped the ease of doing business index over the past couple of years and it recognises the importance of building and positioning India as a hub for startup-led growth of modern industries.
From a real estate perspective, the government’s resolve of improving housing remains in focus. Efforts of augmenting the need for global standard commercial infrastructure such as commercial offices and warehousing are continuing through the widening of REITs. This in turn will augment more supply to meet the demands of modern-age businesses.
A few missed opportunities
While the current Budget has touched every class of citizen in some positive way and lays a foundation for long-term growth, there are certain areas that could have been improved. For example, an allocation to fund the growth of start-ups across India would provide a tangible benefit had it been given more prominence. Similarly, quality education in India can have a significant, far-reaching impact on the sustainable development of our country, which did not attract the top spot in the Budget beyond continuing linear investing in the Skill India programme.
Cautious optimism for 2023
The Budget has taken several key steps towards boosting the Indian economy and strengthening our position as a global economic power. And while the long-term implications and view of this budget are overwhelmingly positive, to enjoy these long-term benefits, we may have to deal with certain challenges this year.
The primary one is the global challenges in the US and Europe where inflation and the fear of recession loom large. Startup investing is largely linked to capital from these economies and if the ongoing funding winter continues for another year, the Start-up ecosystem may not create the magic of uplifting the employment in the private sector. The long-drawn war in Ukraine and building tensions in other geographies may be a dampener on economic growth this year. An unusually disturbed neighbourhood could be another cog in the wheel and above all, India moving towards an election year could have unknown consequences for this sentiment. So, for the private sector, it’s a great time to be cautiously optimistic while continuing to put in consistent work to drive growth and economic expansion.
The writer is the Founder and CEO, Integrow; and Director of Aurum Proptech ((@AurumProptech). Views expressed are personal.
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