The Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the first Union Budget of the ‘Amrit Kaal’ in Parliament on 01 February, 2023. In a conversation with Kamal Sandesh Associate Editor Ram Prasad Tripathy, the Union Finance Minister elucidated at length on how the world has recognized the Indian Economy as a ‘bright star’ in the 75th year of India’s Independence. India’s economic growth is estimated at 7 per cent, the highest among all major economies, notwithstanding the challenging circumstances owing to the massive global economic slowdown, economic distress caused by the COVID-19 pandemic and the ongoing Russia-Ukraine War. She emphasized that the Indian economy is on the ‘Right Track’ and heading towards a ‘Bright Future’. Excerpts of the conversation :
What’s the central objective you wanted to achieve with this first Budget of Amrit Kaal?
The budget is essentially a blueprint for India@100 and India’s Amrit Kaal. We envision a prosperous and inclusive India, in which the fruits of development reach all regions and citizens, especially our youth, women, farmers, OBCs, Scheduled Castes and Scheduled Tribes.
Several factors are favorable and positive for India’s first budget of the ‘Amrit Kaal’, including demographics, infrastructure build-up and global restructuring of supply chains.
This Budget presents a compelling vision and strategy that further strengthens this belief. While providing a strong impulse for near-term growth through a jump in capital expenditure and a reduction in the tax burden on the middle class, it also addresses the technological trends that India should consider as it plans its next phase of growth. We have improved the quality of government spending and the government is taking major steps to revive investment which will drive growth in the years to come.
Despite all hurdles like the Covid-19 pandemic followed by worldwide recession, and Russia-Ukraine war Indian economy is growing at around 7%. What’s the secret behind this growth story of Modi government?
The Indian economy has battled the global headwinds well due to the carefully-calibrated policies undertaken by the Modi government.
The government’s policy response to the COVID pandemic aimed at maintaining macroeconomic stability and protecting vulnerable households, has been carefully designed and well-targeted. It combined demand and supply-side reforms.
India is building infrastructure—roads, railways, airports—at a breakneck pace. We have given free food to 800 million Indians during the pandemic period. We have administered more than 2 billion Covid vaccine jabs, and a vast percentage of them free—an enterprise of a scale hardly seen before in human history.
Strong tax collections, adequate Forex Reserves and positive policy space, along with prudent macroeconomic management, have helped make India’s economy resilient to deal with a financial crisis.
What’s the idea behind the big Capex push in Budget 2023? How it is going to help the growth prospects of the economy?
–A provision of Rs. 10 lakh crore has been made in the budget for capital investment, a massive 33% growth for the third consecutive year, growth potential and job creation, to crowd in private investment and make India truly self-reliant.
–Infrastructure will make it easier and more convenient for people to move goods, services and labour, boosting local economic activity and potentially creating new jobs. This will ensure a significant multiplier effect on the overall medium-term growth prospects of the economy, resulting in economic development of the States.
This year’s Budget has many things to boost the Agriculture sector. Do you think these allocations will also transform the infrastructural requirements of Rural India?
This budget will make agriculture and cooperatives the pivot of the development of the rural economy. The government has brought the world’s largest food storage scheme into the cooperative sector – Storage Capacity. An ambitious plan to form new primary cooperative societies has also been announced in the budget. This will expand the area of milk and fish production along with farming. Farmers, animal husbandry and fishermen will get a better price for their produce.
–Many steps have been taken for the farmers in this budget. We have set a target of Rs 20 lakh crore availability of agricultural credit. We have allocated Rs 2,200 crore for providing quality and disease-free planting material for high-value horticulture crops.
–We have made allocations for natural farming, Agri-startups and Agri-tech which will be beneficial for the farmers. Under PM-Kisan launched by the Modi government, 11.3 crore farmers have been covered to meet their financial needs since inception.
–We have continuously increased the MSP for the farmers. From 2018, the MSP for all mandated crops has been fixed at 1.5 times the all-India weighted average cost of production.
The global pandemic of the recent past has affected the middle class and particularly youth in India. Is this budget going to bring the much-awaited relief to them and create jobs?
–The first budget of Amrit Kaal lays a strong foundation for the aspirations and resolutions of a developed India. This Amrit Kaal will be extremely beneficial for our “Amrit Peedhi”.
–In the last few years, our government has prioritised innovation as a development strategy. Innovation is at the heart of our ‘Atmanirbhar Bharat’ initiative, which has 3 clear objectives-
1. Make in India,
2. Innovate in India, and
3. Transform the Indian Economy.
It will create billions of opportunities for the youth.
–“PM Kaushal Vikas Yojana 4.0”, covering new age courses for Industry 4.0 like Coding, AI, Robotics, Mechatronics, IoT, 3D Printing, Drones and soft skills to skill millions of youths will be started within the next three years.
–30 “Skill India International Centres” will be set up in different states to skill the youth for international opportunities. District education and training institutes will be developed in a vibrant way. Sector-specific skill and entrepreneurship development will be synergised to achieve the objectives of the ‘Dekho Apna Desh’ initiative for tourism.
Tax relief has been given to middle class through the new slabs and rates under the new tax regime. Not every taxpayer could avail of deduction under various provisions of the Income Tax Act. The new tax regime benefits many such taxpayers and they have more freedom to invest in a way that suits them. The new tax regime is simple and easy for taxpayers. Our citizens will not have to pay tax if their income is less than 7 lakhs. We have introduced standard deduction of Rs 50,000, raised the basic tax exemption limit to Rs 3 lakh. These provisions would put more money in the hands of individuals, and thus higher investment potential.
The thrust for Environment and green growth is clearly visible from the huge emphasis of the budget for the Green Hydrogen Mission and from other steps. What’s the road map ahead?
Hon’ble Prime Minister Shri Narendra Modi has given a vision for “LiFE”, or Lifestyle for Environment, to spur a movement of environmentally conscious lifestyle. India is moving forward firmly for the ‘Panchamrit’ and net-zero carbon emission by 2070 to usher in green industrial and economic transition. This Budget builds on our focus on green growth.
The recently launched National Green Hydrogen Mission, with an outlay of Rs. 19,700 crores, will facilitate the transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports, and make the country assume technology and market leadership in this sunrise sector. Our target is to reach an annual production of 5 MMT by 2030.This Budget provides 35,000 crore for priority capital investments towards energy transition and net zero objectives, and energy security by Ministry of Petroleum & Natural Gas.
How will this historic Budget help usher in the Hon’ble PM’s vision of ‘Amrit Kaal’ and position the Indian economy globally?
India is a bright spot in the world with the highest growth rate. In the last nine years, the size of the Indian economy has increased from the 10th to the 5th largest economy in the world.
The government has laid relentless emphasis on capital expenditure. It will complement industrial development with cost-effective logistics infrastructure and seamless connectivity. Several reforms have been proposed to improve the Ease of Doing Business.
India is being seen as a manufacturing hub due to the PLI Schemes, the creation of infrastructure and other reforms done by the government over the years. All these have made India an attractive investment destination and it has received over $160 billion in FDI in the last two financial years. India will also benefit from the EU+1 and China+1 strategies being adopted by the global MNCs.