THE most striking feature of the Union Budget 2020 is its aspirational nature, its philosophy of inclusiveness, its courageous handling of the challenge of the current economic crunch, and its effort to offer the nation a mode of financial management that is expected to go a long way to alter the present economic culture that leans rather too heavily on the Government and official and public arrangements for individual well being on wealth front. With a fairly well-defined New India in mind, Finance Minister Mrs. Nirmala Sitharaman has presented a structure that would make the country think differently and positively in the coming times, help it shed undesirable dependency on official support at every step of the way. Despite the liberalised economy, despite reforms, Indian economy appeared mired in confused thought in which the roles of the Government and the people often seemed to act at cross purposes. The Union Budget 2020 appears to have been designed to shed this culture, aimed at affording to the nation an aspirational economic model in which individual entrepreneurship and State enterprise will form a far more nimble partnership for the future, running far better between the wickets than before -- to explain the intended phenomenon in cricketing terminology.
By that standard, the effort is absolutely laudable and therefore welcome. The details of tax concessions -- to individuals and corporates -- or various sops to economic sectors including banking may have their own importance. But then, it is not possible to ignore the reality that the Government had been tackling those issues for the past few months. The criticality of the Union Budget 2020, therefore, is in its approach of offering to the nation a good enough financial architecture that is expected to chart an altogether independent course in which individual entrepreneurship will assume a greater importance, the indication of which comes from the comprehensive thrust the Government has sought to add to the concept of start-up.
The Government’s philosophy of inclusiveness is reflected in its desire to lighten the tax burden on the middle class, especially the salaried income earners by introducing new personal income tax regime. This despite the fact that the Government is already constrained by the impact of slowdown on tax collections, both on account of corporate taxes collections as well as shortfall in GST targets which in turn has forced the Government to raise its fiscal deficit target to a slightly higher level. Mrs. Sitharaman’s budget has clear demarcation of priority areas that the Government wants to focus its attention on. Among the priority areas is the revival of the farm sector.
The budget seeks to give impetus to new agricultural practices, including disincetivise use of chemical fertilisers and greater use of renewable energy for agricultural practices,reducing dependence on conventional modes of power and encourage use of solar energy. She lays greater stress on creating infrastructure for preserving agricultural produce, their storage, transportation and marketing, food processing. All these futuristic approaches to farm sector, which also include legislation of suitable laws by the states, are not to be treated in isolation.
They are very much the part of integral rural development process, which Mrs. Sitharaman laid emphasis on. Because the Government understands that revival of farm sector and rural development can be one of the triggers for the rebound of the economy, which it believes, is poised to recover in a robust manner during the next one year.
The corporate sector too is desperately waiting for the rural economy to look up as that holds a major key for demand to revive so that in turn manufacturing too gets the much needed pep. Another area of thrust in Mrs. Sitharaman’s budget is the health sector. The budget speech lays stress on augmenting the public sector healthcare system to meet the needs of the common man and provide affordable as well as modern mode of medical attention to the needy. Hence the move to have at least one medical college in each district is a welcome proposal as that will give the people living in remote places access to expert medical help with all the modern facilities made available at the medical institutions at minimum cost. In fact, healthcare is one of major elements in the inclusive growth philosophy of the Government. Another vital area in the budget is the allocation of funds to the education sector.
In fact this is one area of human development that requires all the energies of the society to build enlightened new generation which will meet needs of emerging modern India through learning of new skills that are compatible with the requirements of the growing economy. The Government is aware that the down-turn in the economy is in its passing phase and the strong parameters of the Indian economy will take it back to where it belongs -- fastest growing economy in the world. But for availing that opportune period of revival the Government has to put in place all the required policy tools so as to incentivise private investment. Much of the investment initiative so far has come from the Government. But there are limits to the Government spending. Besides there are external factors like oil shock or disturbed geopolitical conditions in the world, conflicts and disputes, trade wars that can upset the Government’s calculations.
But the budget speech by Mrs. Sitharaman has shown that the Government was well prepared to deal with these imponderables. While the Government is doing what it can to spruce up the economic development, this cannot go on perpetually. The privates sector too has to play its own part and supplement Government’s efforts for the revival of the economy. The Government has done enough for ensuring ease of doing business. It is time the private sector joins hands in this national cause. The Government cannot function in isolation. Private initiative has also to become the partner in this great national endeavour for building the future of the nation.