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  Business   Economy  06 Jul 2019  Blueprint for a $5 trillion economy

Blueprint for a $5 trillion economy

THE ASIAN AGE.
Published : Jul 6, 2019, 2:28 am IST
Updated : Jul 6, 2019, 2:28 am IST

The Budget advocates policies via four pillars of thrust that can push the India economy to a level of $5 trillion — in sync with PM Modi's vision.

Finance Minister Nirmala Sitharaman
 Finance Minister Nirmala Sitharaman

The Hon'ble Finance Minister in her budget speech has delivered a growth oriented and job-oriented blueprint for the economy to promote overall growth and consistent job creation. The Union Budget, the first by the government in its second term, has outlined several new reform initiatives like big privatization push, relaxation of norms for foreign portfolio investors (FPIs), further liberalization of foreign direct investment (FDI) policy, a new policy on rental housing and most importantly incentives for faster adoption of next generation technologies such as electric vehicles. It is investment that drives demand, creates capacity, increases labour productivity, increases new technology, and generates jobs. The Budget advocates policies via four pillars of thrust that can push the India economy to a level of $5 trillion — in sync with PM Modi's vision.

There is a big push for infrastructure spending, promotion of rental housing, simplify archaic rental laws, significant role for private players in railways, introduction of "One Nation One Grid" for affordable power, proposal to have gas and water grids and infrastructure spending to the tune of Rs 50 trillion between 2018 and 2030 for railways. The budget proposes further opening of FDI in aviation sector, media, animation AVGC and insurance sectors in consultation with all stakeholders. 100 per cent FDI will be permitted for insurance intermediaries.

 

The Budget emphasizes on removing critical bottlenecks that hinder the growth of the economy in the second pillar of growth. For ease of access to credit for MSMEs, government has introduced providing of loans upto Rs one crore for MSMEs within 59 minutes through a dedicated online portal. Creation of a payment platform for MSMEs to enable filing of bills and payment thereof on the platform itself, will play a vital role to eliminate delays in payment.

This Budget reinforces the important role that NBFC and HFCs play in credit delivery. Steps are also introduced to allow all NBFCs to directly participate on the TReDS platform. Number of measures are also announced to enhance liquidity access for NBFCs' by permitting investments made by foreign investors and continue getting funding from banks and mutual funds.

 

The government in its earlier term was largely focused on repairing the stressed banking system and undertaking structural economic resets. Despite this, not only have the economy has registered high growth rates but also ensured low inflation and adherence to fiscal prudence. In this term, the expectation from the government is to propel the economy and breaking away from the barriers holding it back. In this regard, the finance minister, in her maiden speech, has delivered a bold budget. The Budget is growth oriented, spurs private investment, keeps government's fiscal consolidation track record intact and uses a variety of methods to bolster the investment cycle led by government spending.

 

Ashishkumar Chauhan, MD & CEO, BSE

Tags: union budget 2019, indian economy