India’s budget carries note of confidence
- 02 Feb 2022
India’s Finance Nirmala Sitharaman presented her fourth consecutive Budget on Tuesday, and she was in an unenviable position compared to many of her counterparts in other countries, including the developed ones. Indian economy has survived the Covid pandemic of 2020 and 2021 relatively well. Though the economy shrank 6.6 per cent in 2020-21, it has bounced back in 2021-22, and the growth is expected to be 9.2 per cent.
The economy is expected to grow between 8 per cent to 8.5 per cent in 2022-23. Agriculture has done extremely well in the two pandemic-hit years because the Covid had less impact in India’s villages compared to the cities and towns, and majority of Indians, nearly 70 per cent, live in the villages. She said, “I recognize we are in the midst of an Omicron wave, with high incidence, but milder symptoms. Further, the speed and coverage of our vaccination campaign has helped greatly. With accelerated improvement of health infrastructure in the past two years, we are in a strong position to withstand challenges.”
She has used the strong position of the economy, and it has been noted by the International Monetary Fund (IMF), that India’s growth rate is the fastest among the top economies in the world, to unveil a plan mooted by Prime Minister Narendra Modi during his Independence Day speech on August 15, of marking the 25 years between the 75th (2022) and the 100th (2047) -- as ‘Amrit Kaal’ or golden time, to usher in the way that people will travel and goods transported through a multi-modal transport system, and a digitized framework which smoothen and fasten the speed of information and transactions. Called the ‘GatiShakti’ or the Power of Momentum, she revealed the seven engines of growth on which this is based: “PM (Prime Minister) GatiShakti is a transformative approach for economic growth and sustainable development.
The approach is driven by seven engines, namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure. All seven engines will pull forward the economy in unison. These engines are supported by the complementary roles of Energy Transmission, IT Communication, Bulk Water and Sewerage, and Social Infrastructure.” It is an ambition plan to change the face of the country in fundamental ways. This is seen not just as a blueprint for the future, but as a way of driving economic growth as well, in the 25 years. It is an ambitious and bold plan for the future. Critics are sure to raise the question whether the government has the means at its command to turn the vision into a reality. The government is confident that it can be done.
A bold decision that Sitharaman has announced in the Budget is about Reserve Bank of India issue a digital rupee, and the imposition of 30 per cent tax on crypto assets and the capital gains tax on its transaction.
The announcement of the digital rupee leaves no ambiguity that the crypto will be recognized a financial asset but not as a currency, and the legal tender of a currency is reserved for the digital rupee. Prime Minister Narendra Modi is one of the few politicians who believes in technology and in the digital future, and he is keen that India should be in the vanguard. It is also the ambition of Modi to turn India into an economic superpower.
He believes that an economically strong India will help India to become a positive partner with other countries in their respective economic journeys into the future. The Indian Budget for 2022-23 carries the keynote of hope and confidence, quite in contrast to the global dissonance on the economic and political fronts.
