03 FEB,2020 | MEDC
Budget 2020 is a sincere attempt by the government to remove structural bottlenecks in the economy and bring in new energy into the system. It has echoed the themes of Aspirational India, Economic Development, and a Caring Society, within a broad framework of boosting industrial and agricultural growth. The budget will undoubtedly have its detractors, but its redeeming feature is that infrastructure development has been strongly emphasized, and the official goal of fiscal consolidation has not been abandoned. A slower than budgeted revenue growth has caused the government to miss the fiscal target, but the breach is within the permissible limit. An innovative proposal of taxation giving taxpayers an option to choose between two systems has been proposed. Its effect on savings and consumption is likely to be mixed, but it is certainly a fiscal experiment worth conducting to gauge future directions of the reform process. The forward and backward linkages of both agriculture and industry have been understood and accommodated, to the extent possible. Farmers are incentivized to go solar, and 20 lakh farmers would be assisted in setting up standalone solar pumps. Rs. 20,000 crore have been allocated for the renewable energy sector in a bid to tackle pollution and climate change, the biggest threat the world will face in the coming decade. Bond market reforms, listing of LIC, removal of DDT, and decriminalizing civil disputes are all positive measuresaimed at enhancing India’s investment climate.Given the current slowdown, there are no shortcuts to revival and it seems that the government chose the longer but more sustainable recovery route to the easier but risker alternative. It is heartening to note that not only is the ease of doing business being facilitated, but the ease of living has also been emphasised. After all, the economic aspect is not the only lens with which to view a society’s overall progress. Overall, Budget 2020 is a good statement of intent, which is progressive and forward looking. It will set the tone for more reforms in this decade.
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