Laghu Udyog Bharati-Karnataka Terms Union Budget 2021-22 As a
“Growth-oriented Budget” FM announces Massive CAPEX infusion to boost Infrastructure and Healthcare Development
PS Srikanta Dutta, President LUB-K
Welcoming the Union Budget for 2021-22, Laghu Udyog Bharati-Karnataka (LUB-K) today termed it as a “Growth-oriented Budget that will boost macroeconomics of the country, with specific emphasis on the development of core sectors especially the infrastructure, Healthcare, Agriculture, Rural sectors.
Finance Minister Smt. Nirmala Sitaraman presenting her third Budget in a row today, sought to address infrastructure development, agriculture distress, creation of jobs, increase disposable income for masses and boost economic growth while at the same time stick to fiscal prudence at the financially constricting times.
The hallmark of the Finance Minister’s presentation today was a promise of containing Fiscal Deficit to 6.8 percent by FY22 of the GDP without compromising on the spending on development schemes despite more allotment of Capex and increasing oil bill which is putting severe burden on the Fiscal Deficit.
Welcoming the Union Budget 2021-22 Mr. PS Srikanta Dutta, President LUB-K said: “The Budget has a slew of policy-oriented announcements and targets to build boosting infrastructure, increase consumption, create jobs, promote MSME sector, further integrate digital India, improve social sectors, agriculture sector and investments on core sectors, which we believe will spur overall economic growth as it clearly sets the right tone for overall economic growth for current fiscal”.
Further Mr. Srikanta Dutta said: “Great to see the FM enhance spend on Healthcare, Infra, Stressed Assets, Insurance FDI and monetisation of infra assets”. Similarly the focus on rail and road infrastructure especially, economic and logistic corridors will enhance competitiveness of Indian agriculture by lowering the cost of transportation and better connectivity between production and consumption markets, mainly domestic but also global.”
On the road and railway infrastructure trusts he said: “The sharp increase in budgetary allocation for roads, highways and railways will have a multiplier effect on economic growth over the medium term. This will radically improve seamless transportation of goods and services and mobility in the country. The infusion of massive Capex into the public transport system in the country and government’s dedication to investments into construction of metro lines and in improving public bus service, specifically in the
Tier 2 cities has the potential to give a boost to the much-needed employment generation”.
Mr. Dutta said that the announcement of Voluntary Vehicle Scrapping Policy is a welcome measure by the Government. This enables Vehicles to undergo fitness tests after 20 years for Private Vehicles, 15 years for Commercial Vehicles. He Said: “Fitness testing for both PVs and CVs is a positive move to create not only employment opportunities but a move that will ensure a cleaner environment as part of the Health Infrastructure pillar.”
Touching on the setting up of a Development Finance Institution (DFI), with capitalisation of Rs 20,000 crores, Mr. Dutta said “It is the first major announcement on infrastructure funding by FM Sitharaman – creation of a dedicated institution DFI– is very significant, as long gestation infra funding has been a long-pending. By launching DFI the government has set an ambitious target of building infrastructure in the country”
On the power reforms Mr. Dutta said: “It is a radical change, the plan for a framework that helps consumers choose their electricity supplier, will unleash competition and also coerce distribution companies to perform better.”
On the real estate boost in the budget he said: “Amendment in InvIT and REIT structures for debt investors will ease fund raising and will provide the momentum to commercial real estate asset class”
Another significant announcement proposed by FM is related to security markets which sends right vibes to investors both domestic as well overseas: He said: “Rationalising different security market regulations under one market code is a significant step in ease of doing business and would go a long way in attracting foreign investments in India”
Commenting on completion of 4 years of GST Mr. Dutta said: “With the implementation of the seamless integration of GST, there is growing confidence in the Government’s ability to take on difficult reforms in India. The improvement in investor confidence is evident from capital flows as foreign investors continue to bet on India as one of the best destinations for investment across the emerging markets.”
In conclusion, LUB-K feels that the Budget tries to provide a stable, predictable and consistent policy framework to facilitate long-term investment decisions. The Finance Minister has done a balancing act by focusing her attention on all sectors without overtly hurting or appeasing any individual section of the society and all the policy initiatives seamlessly integrate with the Aatmanirbhar Mission. Further the budget has all essential ingredients to achieve the desired growth rate of 7 percent as projected by several overseas consulting firms.